QUESTION 2 Sita earned a salary of $65,000 in 2001 and $85,000 in 2006. The cons
ID: 1161740 • Letter: Q
Question
QUESTION 2
Sita earned a salary of $65,000 in 2001 and $85,000 in 2006. The consumer price index was 177 in 2001 and 266 in 2006. Sita’s 2006 salary in 2001 dollars is
a.
$127,740.11
b.
$56,560.15.
c.
$43,251.88
d.
$97,683.61
QUESTION 30
The table below lists the per gallon prices of gas and milk for the months of June, July, and August. Assume that the typical consumer buys 60 gallons of gas and 4 gallons of milk each month, and that June is the base period.
Month
Price of Gas
Price of Milk
June
$1.90
$3.25
July
$2.20
$3.75
August
$2.50
$4.00
Refer to Table. What is the inflation rate for July?
a.
- 13.61%
b.
60.1%
c.
15.75 %
d.
10%
QUESTION 43
In an economy, a typical consumer's basket consists of 4 pounds of potatoes and 3 pounds of papaya.
Year
Potatoes
Papaya
2014
$40
$24
2015
$50
$36
Refer to the above table: If 2015 is the base year, then the CPI of 2014 was
a.
75.3.
b.
100.0.
c.
116.0.
d.
132.8.
QUESTION 1
Tara earned a salary of $40,000 in 1996 and $65,000 in 2006. The consumer price index was 160 in 1996 and 266 in 2006. Tara’s 1996 salary in 2006 dollars is
a.
$66,500.00.
b.
$43,062.50.
c.
$68,900.00.
d.
$108,062.50.
a.
$127,740.11
b.
$56,560.15.
c.
$43,251.88
d.
$97,683.61
Explanation / Answer
Question 2
Salary in 2001 = $65,000
Salary in 2006 = $85,000
CPI in 2001 = 177
CPI in 2006 = 266
Calculate the Sita's 2006 salary in 2001 dollars -
Salary in 2001 dollars = Salary in 2006 * (CPI in 2001/CPI in 2006)
Salary in 2001 dollars = $85,000 * (177/266) = $56,560.15
Sita's 2006 salary in 2001 dollars is $56,560.15
Hence, the correct answer is the option (b).