Question

In 2015, the consumer price index (CPI) was 238,000 whereas it was about 100 in 1982. Suppose that one of your parents had a job that paid $28000 in 1982 and a job that paid $60,000 annually in 2015. Relative to 1982, we could say that your parents nominal income (increased, decreased or stayed the same) in 2015 and that your parents real income (increased, decreased or stayed the same)

Answer 1

$25.21

Step-by-step explanation:

Data provided as per the question

Nominal income in 2015 = $60,000

Consumer price index in 2015 = $238,000

Consumer price index in 1982 = 100

The computation of real income is shown below:-

Real income in 2015 = (Nominal income in 2015 ÷ Consumer price index in 2015) × Consumer price index in 1982)

= ($60,000 ÷ $238,000) × 100

=$25.21

Therefore, the real income is decreased with compared to 1982