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In 1914, the “typical” daily wage at the Ford Motor Company was $5.00. In 1928, the figure was increased to $6.00. The U.S. CPI was 10.0 in 1914, and in 1928 it was 17.1. It follows that if Henry Ford had kept his workers’ real daily wage constant between 1914 and 1928, then the nominal 1928 wage would have been _____. Select one: a. 3.51 b. 8.55 c. 10.26 d. 2.92

In 1914, the “typical” daily wage at the Ford Motor Company was $5.00. In 1928, the figure was increased to $6.00. The U.S. CPI was 10.0 in 1914, and in 1928 it was 17.1. It follows that if Henry Ford had kept his workers’ real daily wage constant between 1914 and 1928, then the nominal 1928 wage would have been _____. Select one: a. 3.51 b. 8.55 c. 10.26 d. 2.92

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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In 1914, the “typical” daily wage at the Ford Motor Company was $5.00. In 1928, the figure was increased to $6.00. The U.S. CPI was 10.0 in 1914, and in 1928 it was 17.1. It follows that if Henry Ford had kept his workers’ real daily wage constant between 1914 and 1928, then the nominal 1928 wage would have been _____.

Select one:
a.

3.51

b.

8.55

c.

10.26

d.

2.92

Expert Solution
Step 1

CPI is the ratio of the cost of a basket of the current year to the cost of a basket of the past year and multiply by 100. It means the ratio of the price of the current year to the price of the past year.

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