Q32 · Practice questionSimple familiar4 marks
QUESTION 32 (4 marks)
A worker’s weekly wage rises from $1250 to $1312.50. Over the same period the CPI rises from 125 to 130. Calculate the percentage change in real wages, using the ratio method. Explain the result.
WORKED SOLUTION
4 marksPractice marking scheme
Answer
Real wages rise by approximately 0.96%.
Working
Nominal wage growth is 5%; price growth is 4%. The exact change is [(1312.50/1250)/(130/125) − 1] × 100 = 0.9615%. The worker can purchase slightly more of the representative basket, although their own spending pattern may differ.
Marking criteria
- Calculates nominal wage and CPI growth. [1 mark]
- Uses the ratio method and obtains approximately 0.96%. [2 marks]
- Explains the change in purchasing power. [1 mark]
Practice question aligned to the current QCAA syllabus; review the worked solution and marking criteria.
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