Suppose that over the past 10 years your yearly income has risen from $30,000 to $40,000. Overthe same period the price index has risen from 150 to 200. What has happened to your realincome over the same period?It has decreased.It has remained the same.It has increased.The correct answer cannot be determined because we don't know thebase year.

Real Income: It is the income after adjusting for the change in prices.

Answered: Suppose that over the past 10 years…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Given the following data of monthly salary of an employee : (i) Calculate the real monthly income for each year. (ii) In which year did the employee have the highest purchasing power? (iii) How much salary should he have earned in each of the years to give him the same purchasing power as in the year of his highest real income? year Monthly Salary ($) |Price Index (1997 = 100) 15,000 15,500 16,000 16,500 17,000 %3D 2000 2001 115 120 2002 130 2003 138 2004 144 2005 18,000 150
Real Income Joshua Vermier of Sacramento, California, received a raise after his first year on the job to $44,200 from his initial salary of $40,000. What was Joshua's raise stated as a percentage? Inflation averaged 2.4 percent for the year. Round your answer to one decimal place. What was his real income after the raise? Round your answer to nearest cent. What was his real raise stated as a percentage? Round your answer to one decimal place. %
Ellena's pension was $10 per period in 2033. What amount of money in the base year would give her the same purchasing power? Do not enter the S, and round to whole cents. If your answer is $2.224, enter 2.22. If your answer is $2.225, enter 2.23. 10 Year 2031 2032 2033 2034 2035 2036 CPI 90 95 100 104 110 112
Sally worked hard all year and put her savings into a mutual fund that paid a nominal interest rate of 4 percent a year. During the year, the CPI increased from 185 to 190. What was the real interest rate that Sally earned? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
The consumer price index increased from 220 to 253. If you received a raise equal to 10% during this time period then your real income has decreased. True False
Sam bought a rental property for 500,000 five years ago. He sold the property this year for $2,200,000 and spent $343,335 fixing it up before selling the property. If the inflation rate for the past 5 years has been steady at 5% annually. a. What is the actual interest rate of this investment? b. What is the real interest rate Sam earned?
Year Units of Output Price per unit 8 1 2 3 4 5 If year 2 is the base year, what is the consumer price index for year 1? 10 15 18 20 4 5 6 3 4
The table given below reports the price of soda over four consecutive years.Table 5.7 Price Data Year Base-Year Soda Price Current Soda Price 1 (base year) $0.30 $0.30 2 $0.30 $0.45 3 $0.30 $0.55 4 $0.30 $0.65 Refer to Table 5.7. Compute the price index for the third year. Group of answer choices 100 150 130 118 183
On January 1, 2011, Maria invested $1,000 at 6 percent interest per year for three years (with yearly capitalization). The CPI stood at 100 in January 1, 2011. At year later it climbed to 105 and on January 1, 2013 was 110, and on January 1, 2014, the day Marias investment matured, the CPI was at 120. Find the real interest rate that Maria's total real return over the 3-year period. (Write your answer without the %. If your answer is XX.yy%, write XX.y, only two decimal points.)
A worker plans to retire at the age of 65, at which time he will start collecting his retirement benefits. Then there is a sudden change in the forecast of inflation when the worker is 63 years old. In particular, inflation is now predicted to be higher than it had been expected so that the average price level of market goods and wages is now expected to be higher. What effect does this announcement have on the person’s preferred retirement agea. If retirement benefits are fully adjusted for inflation?b. If retirement benefits are not fully adjusted for inflation?
The following price index is available for a product: Year Price index 1 (base year) 100 2 106.4 3 109.5 4 116.3 5 120.5 If the price was £872 in Year 2, what is the price of the product in Year 5 (to 2 decimal places)? a. 769.97 b. 959.60 c. 844.46 d. 987.56
The values of consumer price index (CPI) for 2005 and 2018 are 78.8 and 272.6 respectively while the average annual income of poultry farmer is given as N216,000 and N360,000 accordingly. Comment on the welfare of the poultry farmer using the purchasing power of the income received between, the two years under consideration.

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