EBK ESSENTIALS OF ECONOMICS
8th Edition
ISBN: 8220103599832
Author: Mankiw
Publisher: Cengage Learning US
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Chapter 16.2, Problem 2QQ
To determine
Thecalculation of present worth of paycheck.
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While rooting through the attic, you discover a box of old tax forms. You find that your grandmother made $175 working part-time during December 1964, when the CPI was 31.3. How much would you need to have earned in December 2014, when the CPI was 234.8, to have at least as much real income as your grandmother did in 1964? Give your answer to two decimals.
Suppose your mother received a salary of $35,000 in 2000. To preserve the purchasing power, what should this salary be in 2020 if the CPI in 2000 was 120 and CPI in 2020 is 200. Show all your calculations.
In 1984 when the CPI was 104.1 Amie made four dollars babysitting what would that be in today's CPI equals 263.2 dollars to two decimals
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- The CPI (using a 2000 base year) for 1965 is 26.0. Suppose a household's annual take-home pay in 1965 was $8,320. What would be an equivalent take-home pay in 2000?arrow_forwardMaddie's nominal income was $33,000 in 2012. In 2013, because of her excellent work ethic, she received a raise that increased her nominal income to $35,000. Maddie knew a lot about inflation so she decided to see how much of a raise she really received. After researching the consumer price index at the Bureau of Labor Statistics web site, she found that the CPI for 2012 was 110 and that it jumped to 125 in 2013. Calculate the percent change in Maddie's real income after she was given a raise. Was she hurt or helped by this unanticipated inflation? Explain.arrow_forwardUse your CPI Chart to calculate the numbers 2-4. 2. If you made $38,000 in 1997, how much money would you have to make in 2006 to maintain your real income? Explain.arrow_forward
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