Exam 11: Measuring the Cost of Living: Correcting Economic Variables for the Effects of Inflation

Suppose in the year 2000 Ken earned $60,000 per year.If the CPI in the year 2000 was 172.2 and in 2015 was 236.7,what is the minimum level of income Ken would have needed to earn in 2015 to have maintained the same standard of living he had in 2000?

In 1949,Sycamore,Illinois built a hospital for about $500,000.In 1987,the county restored the courthouse for about $1.7 million.A price index for nonresidential construction was 24 in 1949,108 in 1987,and 126.5 in 2000.According to these numbers,the hospital cost about

If the nominal interest rate is 5 percent and the rate of inflation is 9 percent,then the real interest rate is

In 1970,Professor Plum earned $12,000;in 1980,he earned $24,000;and in 1990,he earned $36,000.If the CPI was 40 in 1970,70 in 1980,and 130 in 1990,then in real terms,Professor Plum's salary was highest in

If the nominal interest rate is 8 percent and the real interest rate is 5.5 percent,then the inflation rate is

The CPI was 96 in 1982,and the CPI was 230 in 2012.How much money would you have needed in 2012 in order to buy what you could have bought with $500 in 1982?

Scenario 24-2 The price tag on a golf ball in 1975 read $0.20,and the price tag on a golf ball in 2005 read $2.00.The CPI in 1975 was 52.3,and the CPI in 2005 was 191.3. -Refer to Scenario 24-2.In 1975 dollars,a 1975 golf ball cost $0.20 and a 2005 golf ball cost

Iggie took a university teaching job as an assistant professor in 1980 at a salary of $15,000.By 2011,she had been promoted to full professor,with a salary of $70,000.If the price index was 82 in 1980 and 225 in 2011,then what is Iggie's 1980 salary in 2011 dollars?

During a certain year,the nominal interest rate was 8 percent,the real interest rate was 3 percent,and the CPI was 176.7 at the beginning of the year.The CPI at the end of the year was

The consumer price index was 225 in 2008 and 232.2 in 2009.The nominal interest rate during this period was 6.5 percent.What was the real interest rate during this period?

The consumer price index was 200 in 2008 and 190 in 2009.The nominal interest rate during this period was 4.5 percent.What was the real interest rate during this period?

When box office receipts are not corrected for inflation,the most popular movie of all time is

In the United States,nominal interest rates were

If the nominal interest rate is 5 percent and the rate of inflation is -2.5 percent,then the real interest rate is

Marion collected Social Security payments of $250 a month in 1985.If the price index rose from 90 to 108 between 1985 and 1986,then her Social Security payments for 1986 should have been

Elizabeth just received her Ph.D.in economics and has two competing job offers.The first is in Washington,D.C.and pays a salary of $200,000.She has a similar job offer in Austin,TX that pays $90,000.Which pair of CPIs would make the two salaries have the same purchasing power?

Suppose that over the past year,the real interest rate was 3 percent and the inflation rate was 1 percent.It follows that

Suppose that over the past year,the nominal interest rate was 5 percent,the CPI was 150.3 at the end of the year,and the CPI was 144.2 at the beginning of the year.It follows that

Dewey earned a salary of $75,000 in 2001 and $95,000 in 2006.The consumer price index was 177 in 2001 and 266 in 2006.Dewey's 2006 salary in 2001 dollars is

Wilson is offered a job in Kansas City that pays $50,000 and a job in Dallas that pays $60,000.Which pair of CPIs would ensure that the two salaries have the same purchasing power?