Question

Suppose you had a choice between living in the United States in 1900 with an income of $1,049,000 per year or in the United States in 2018 with an income of $48,000 per year. Assume the incomes for both years are measured in 2018 dollars. In which year would you have the highest real income? In which year would you have the better standard of living?

Answer 1

H Income in re come in year 1900 a $1,049,000 / year ome in year 2018 - $40,000 / Year Both Year's Income more measured in 2018 a so Bare year of Both income & Year 2018 since Bare Higher the year of Income Income measurement are se means Higher the Real Income So In Year 1900, Real Income livelwill be highes Since Highes the Real Income means highes the living standard. to and In Year: 1900 to the real income eicome is higher so in year: 1900 the livining standerd is also highes (better). - In which year would you have higher real Income? [1900] >> In Which Year you would you have the better std. I living ? [1900]