Economics: The Basics 1st Edition by Mike Mandel

Exercise 8

One of the biggest decisions most of us have to make is which industry to look for work in. Compensation matters, but it also matters whether pay is rising or falling. The following table gives the annual average pay in five major industries for 2000 and 2006 (the figures include the pay of all workers, including top managers).
a) Calculate the percentage increase in pay for each industry from 2000 to 2006.
b) What was the real percentage increase in pay for each industry from 2000 to 2006, using the rule of thumb described on page 165? (Use the table in problem 2 on page 172 to calculate the percentage change in the CPI.)c) Calculate the real pay in each industry in 2006, measured in 2000 dollars.

Reference: Table in problem 2 on page 172