Suppose That Over the Course of a Year, One's Wage

Multiple Choice

Suppose that over the course of a year, one's wage increases from $20 per hour to $22 per hour. If the inflation rate for the year is 12 percent, then the

A) real wage has increased by 10 percent.
B) nominal wage has increased by 1 percent.
C) real wage has increased by 2 percent.
D) real wage has fallen by 2 percent.
E) nominal wage has decreased by 10 percent.