Recently a teachers' union argued that the standard of living of teachers working for the school district was falling. The negotiating team for the school board replied that this was not true because the teachers had received significant increases in nominal income through collective bargaining. Could the union statement be correct?
Answer: Yes. The union statement is correct. This is because despite the fact that the teachers have received significant increases in nominal income, the value may fall if the prices of goods and services increases/ inflation.
