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Finding Nominal Wage Rate

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Here are values of CPI (multiply by 100) for each year from 1990 to 2000. A report found that the real entry level wage rate for college graduates declined by 8% between 1990 and 1997. The nominal entry level wage in 1997 was $13.65 per hour.
1990 130.7
1991 136.2
1992 140.3
1993 144.5
1994 148.2
1995 152.4
1996 156.9
1997 160.5
1998 163.0
1999 166.6
2000 172.2

Assuming that the findings are correct, what was nominal entry level wage in 1990?

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Solution Summary

Solution describes the formulas and methodology to find nominal entry level wage rate in 1990 by using consumer price index.

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Solution:

Nominal entry level wage in 1997=$13.65 per hour

CPI for 1990=130.7
CPI for ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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