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1.Suppose that a typical doctor earned $41,000 in 1978. In addition, you know that in 1990...

1.Suppose that a typical doctor earned $41,000 in 1978. In addition, you know that in 1990 a typical doctor earns $76,000. Finally, you also know that the CPI in 1978 is 210 and in 1990 is 230.

Given this information, a doctor's 1978 salary in 1990 dollars is $__________.

2. Suppose that a typical professor earned $28,000 in 1978. In addition, you know that in 1998 a typical professor earns $93,000. Finally, you also know that CPI in 1978 is 90 and in 1998 is 250.

Given this information, the salary of a typical professor in 1998 relative to 1978 is (select one):

  1. higher
  2. lower
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Answer #1

1) Salary in 1978 = 41000

Salary in 1990 = 76000

CPI in 1978 = 210

CPI in 1990 = 230

The 1978 salary of the doctor in 1990 dollars = 41000*230/210 = 44905

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