Question

NAME Prior Last Name, First Name Use the information in the table below to answer questions 7_1 2008 CPI (1982-1984 = 100) Nominal Income Year 215.303 $48,000 $49,000 214.537 2009 218.056 $51,000 2010 224.939 $53,000 2011 229.594 $54,000 2012 232.597 $55,000 2013 This person's real income in 2011 was approximately purchasing power of his/her income $23,562, decreased b. $23,562, increased $53,000; decreased d. $53,000; increased . This means the 7. slightly from 2010 to 2011 8. rounded to the tenth. The inflation rate for The inflation rate for 2009 was 2013 was rounded to the tenth. -0.4%; 3% (6.) 0.4%; 1.3% c. 7.7%; 3% d. 7.7%; 1.3% Based on the answer to #8, what nominal income in 2013 would keep this person's purchasing power the same as in 2012? a $54,702 b. $54,000 C. $23,216 d. $55,715 10. You do not have to do any calculations to know that the purchasing power of this person's income increased from 2008 to 2009 because: nominal income increased from $47,000 to $48,000. the CPI decreased from 215.303 to 214.537. nominal income increased and the CPI decreased. d. the percentage change in nominal income was less than the percent the CPI. le percentage change

Answer 1

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6-7. Answer. A Real Income - Nominal Income x100 - СРІ 53000 x100 – 23562 224.939 - Real income of 2010- 51000 xloo - 23388 218.056 - power is decreased & because inflation. Purchasing increased a & Answer-c CPI in 2009 - CPL in 2008 Inflation in 2009 = inflation in 2013 = CPI in 2013 - CPI in 2012 a-9 Answer. A Real income of 2012 = 54000 x 100 = 23519.77 229. 594 Nominal Income - Real Income x CPI To be vreal income 23519.77 in 2013 then Nominal Income = 23519.77 X CPI (2013) = 23519.778 232.597 = 54706.20 loo x-10- Answer B