A recent college graduate has received the annual salaries shown in the following table over the past four years. During this time, the Consumer Price Index (CPI) has performed as indicated in the table below. Determine the annual salaries in year-zero Sterling Pound £ (b = 0), using the CPI as the indicator of general price inflation. End of Year Salary (Actual £) Consumer Price Index (CPI) 1 £34,000 2.4% 2 £36,200 1.9% 3 £38,800 3.3% 4 £41,500 3.4%

A recent college graduate has received the annual salaries shown in the following table over the past four years. During this time, the Consumer Price Index (CPI) has performed as indicated in the table below. Determine the annual salaries in year-zero Sterling Pound £ (b = 0), using the CPI as the indicator of general price inflation. End of Year Salary (Actual £) Consumer Price Index (CPI) 1 £34,000 2.4% 2 £36,200 1.9% 3 £38,800 3.3% 4 £41,500 3.4%

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter7: Inflation

Section: Chapter Questions

Problem 4SQ

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