If the earning is $15 per hour with the inflation rate for the current year is 10% and the firm provide cost-of-living raise grounded on the inflation rate, then the amount that will be received after the raise. Had the cost-of-living raise was granted on the basis of last year's inflation, whether the nominal income would have been keeping up with the cost of living.

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Chapter 7, Problem 7E

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If the earning is $15 per hour with the inflation rate for the current year is 10% and the firm provide cost-of-living raise grounded on the inflation rate, then the amount that will be received after the raise. Had the cost-of-living raise was granted on the basis of last year's inflation, whether the nominal income would have been keeping up with the cost of living.

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