Cost-of-living raise based on raise on rate of inflation

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Suppose you are currently earning $15 an hour. If the inflation rate over the current year is 10 percent and your firm provides a cost-of-living raise based on the raise based on the rate of inflation, what would you expect to earn after your raise? If the cost-of-living raise is always granted on the basis of the past year's inflation, is your nominal income really keeping up with the cost of living?

Reference no: EM131001190

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