228k views
0 votes
Assume that Ms. Sawyer's salary is $42,000, up from $40,000 last year, while the CPI is 157.5 this year, up from 150 last year. This means that Ms. Sawyer's real income has

User IGGt
by
7.9k points

1 Answer

3 votes

Answer: stayed the same

Step-by-step explanation:

The Consumer Price Index (CPI) simply measure average change in price over time based on the prices that were paid for goods and services.

If Ms. Sawyer's salary is $42,000, up from $40,000 last year, while the CPI is 157.5 this year, up from 150 last year. This means that Ms. Sawyer's real income has stayed thesame. This is because:

$42,000/157.5 = 266.67

$40,000/150 = 266.67

Since we both got thesame answers, Sawyer's real income is thesame.

User Ajay Yadav
by
7.6k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories