Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN: 9781337091985
Author: N. Gregory Mankiw
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 6.2, Problem 2QQ
To determine
Thecalculation of present worth of paycheck.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
The average hourly wage in 1975 was $6.50, and $17 in 2002. CPI stood at 42 in 1975 and the CPI base year is 2002.
Calculate the rate of inflation between 1975 and 2002.
What is the average hourly wage in 2002 in real terms (i.e. in terms of the 1975 average hourly wage)?
In terms of living standards, is the worker better off in 1975 or 2002? Justify your answer.
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.
Chapter 6 Solutions
Brief Principles of Macroeconomics (MindTap Course List)
Knowledge Booster
Similar questions
- 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 decimalsarrow_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_forwardThe 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_forward
- Use 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_forwardSuppose the current CPI is 252 and in 2005 it was 196. A pair of Levi's jeans costs $43 today. Based on the CPIs, what would you expect the 2005 price to have been for the same style of Levis, in a similar retail outlet? Round your answer to two decimal places. 0 $ Click or tap the numbers or use your keyboard to type. If you're not sure, just take a guess. 1 2 3 4 5 6 7 8 9 Donearrow_forwardThe CPI in December of the year 2000 was equal to 174.6. In May of 2023, the most recent month available, the CPI was 304.2. If you made $35,000 in 2000, how much income would you have to make in March of 2023 to maintain the same purchasing power? Please show your work.arrow_forward
- Use the information in the table to calculate a consumer price index (CPI) and the inflation rate. The base year is 1975. Rou answers to two decimal places. Market basket Quantity 1975 prices 1976 prices A dozen eggs 29 $1.10 $1.70 Calculator 19 $15.00 $17.00 Microwave oven 9. $180.00 $230.00 What is the CPI for 1975? 100 What is the CPI for 1976? 126.82 What is the inflation rate for 1976? Enter numeric value Incorrectarrow_forwardSuppose Billy started working at a graphic design firm in 2014 at a nominal wage of $16 per hour. In that year, the CPI was 172. Billy was guaranteed a cost of living adjustment of $2 every two years. His nominal wage will increase $2/hour every two years. Fill in the table to show the change in his real wage. Round to two decimal places.arrow_forwardSuppose we shopped for a basket of goods in 2000 and it cost $350. Suppose the same basket of goods adds up to $385 in 2001. If we use 2000 as a base year, what would be the 2001 CPI?arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Economics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co