**Understanding the Impact of Inflation on Earnings**In 1995, when the consumer price index (CPI) was 152.38, women earned a median income of $12,130 per year. To understand how inflation affects purchasing power, it's crucial to adjust this amount for changes in the CPI. If the consumer price index in 2015 was 236.99, how much was $12,130 in 2015 dollars? Choose the correct adjusted amount from the options below:- $18,865- $16,259- $12,130- $7,799**Explanation of the Calculation:**To compute the equivalent amount in 2015 dollars, we use the formula for adjusting amounts for inflation:\[ \text{Adjusted Amount} = \text{Original Amount} \times \frac{\text{CPI in 2015}}{\text{CPI in 1995}} \]Using this formula, we can determine how $12,130 in 1995 compares to 2015, considering the changes in CPI. This helps to account for the decrease in purchasing power due to inflation over the years.Select the correct option to fully understand the real value of median income earned by women in 1995 when expressed in 2015 dollars.

Given - Consumer Price Index in 2015 = 236.99, Consumer Price Index in 1995 = 152.38, Median Income…

Answered: In 1995, when the consumer price index…

In 1995, when the consumer price index was 152.38, women earned a median income of $12,130 per year. If the consumer price index in 2015 was 236.99, how much was $12,130 in 2015 dollars?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Suppose your income rises from $20,000 to $21,000 while the CPI rises from 150 to 180. Your standard…

A: The standard of living improves when there is an increase in income as the consumer is able to buy…

Q: The nominal income of the population increased by 20% over the year, and the consumer price index…

A: Real Income is the Income of an individual after accounting for the inflation how much money will be…

Q: What are the differences between the Consumer Price Index and the Producer Price Index?

A: The consumer price index and the producer price index are the two important measures of inflation.

Q: The Consumer Price Index (CPI) is a measure of the average change in price over time from a…

A: Answer: It is given that the price change in cars is parallel to the change in CPI. It means the…

Q: How does Inflation Rate and Gross Domestic Product affects the employment rate?

A: Employment rates are characterized as a proportion of the degree to which accessible work assets…

Q: n 1950, the federal minimum wage for the United States was $ 0.75. How much would this minimum wage…

A: The hourly wage rate is measured in dollars, on an average. The hourly wage rate measured in dollars…

Q: In 1954, Canadian Prime Minister Louis Stephen St. Laurent was paid a salary of $15 000. Stephen…

A: A price index is a metric that measures the proportionate, or percentage, change in a set of prices…

Q: You can use a price index to study the buying habits of individuals? True or false

A: The average change in prices between periods or the average difference in prices between places is…

Q: 13. In 2018 your annual salary was $54,370 per year and the CPI was 133.4. In 2022 your annual…

A: The objective of the question is to calculate the inflation-adjusted salary for the year 2022 based…

Q: Consider the simple economy that produces only three products. Use the information in the following…

A: CPI refers that Consumer Price Index which means a measure of the average change overtime in the…

Q: Consider the simple economy that produces only three products. Use the information in the following…

A: CPI is a measure of the overall change in the price paid by the consumer on a basket or group of…

Q: On January 1, 2012, Albert invested $10,000 at 6 percent interest per year for three years. The CPI…

A: A consumer price index measures the basket of goods purchased by households. It is used to calculate…

Q: Over a long period of time the CPI rose from 100 to 150. What does a CPI of 150 mean? If the price…

A: A price index number is a macroeconomic measure that compares a series of prices in different time…

Q: What is the Consumer Price Index?

A: ‘Price index’ is a measure of relative price(P) changes. It indicates the changes of P over a time…

Q: In 1984 when the CPI was 104.1 Amie made four dollars babysitting what would that be in today's CPI…

A: Taking year 1984 as the base year=104.10 so, prices in 2021 has increased…

Q: If the CPI index was 220 in 2009, then the cost of tuition in 2009, as the (Enter your response…

A: Tuition fee in 1989 = $ 1994CPI (1989) = 115CPI(2009) = 220Tuition Fee 2009 = CPI 2009/CPI 1989 X…

Q: Assume you put money into an asset that pays you 7 percent interest and inflation is 5 percent.…

A: The inflation rate is the rate at which the price level increases over time. The inflation rate is…

Q: Last year you bought a house for $200,.000, and you sell the house this year for $230.000,…

A: Answer; 1) inflation = (115.5/110) - 1 = 0.05 or 5% Capital gain = 230000-200000 = 30000 Tax on gain…

Q: If the base year is 1970 and the 2016 price index is 135, purchases of $7,000 of goods in the base…

A: Price Index = 135Base year purchase price = $7000

Q: The table below presents some data on the federal minimum wage and the CPI for several years. Fill…

A: In economics, the inflation rate shows the overall increase in the price level in the economy over a…

Q: If your salary increased by 9 percent and prices increased by 3 percent, how much did your real wage…

A: As per given data, Nomini increase = 9% Inflation = 3%. Real wage calculated as below....

Q: The consumer price index (CPI) rose from 105.9 to 113.4, while Helen's net salary decreased 7.0 %.…

A: Here, given information is, Initial CPI (base year): 105.9 Final CPI (current year): 113.4 Change…

Q: Jenny earned a salary of $48,000 in 2010 and a salary of $60,000 in 2014. The consumer price index…

A: Consumer price index refers to the cost of the market basket of goods and services relative to the…

Q: Is the consumer price index a good measure of the general price increase of consumers? How?

A: The consumer price index is an extensive measure utilized for estimation of value changes in a bit…

Q: The following table shows the average nominal interest rates on six-month Treasury bills between…

A: find below the answer.

Q: If period 1 is the base year, the bundle price of goods in period 1 is $200, and the bundle price of…

A: Price index: - it is the measure of change in the price level, it measures the change in the price…

Q: How can I find the Consumer Price Index

A: Introduction The Consumer Price Index (CPI) represents as a measure for the general level of prices…

Q: Maddie's nominal income was $33,000 in 2012. In 2013, because of her excellent work ethic, she…

A: Given, Nominal income in 2012 = $33000 Nominal income in 2013 = $35000 CPI of 2012 = 110 CPI of 2013…

Q: 13. In 2018 your annual salary was $54,370 per year and the CPI was 133.4. In 2022 your annual…

A: The objective of the question is to calculate the inflation-adjusted salary for the year 2022 based…

Q: Which Professor Is Better Off? Suppose the starting salary for a new assistant economics professor…

A: Given that: Year CPI Nominal Salary 1976 56.9 $20,000 2014 236.7 $85,000

Q: Find net factor income from abroad if national income is $20,000 million and NDPFC is $13000 million

A: The information being given is:- National Income = $20,000 million Net domestic product at factor…

Q: Suppose you earned $100,000 in a given year. Calculate your real income, assuming the CPI is 200 for…

A: The real income is the income that is adjusted with the inflation rate in the economy. the general…

Q: Suppose the Consumer Price Index in 2016 is 127.1 with 2002 as the base year a) What is the…

A: The purchasing power measures the change in the value of the dollar to the consumer of goods and…

Q: David earned a salary of $43,500$43,500 in 1994 and $89,000$89,000 in 2010. The consumer price index…

A: The Consumer Price Index measures the overall change in consumer prices over time based on a…

Q: Why is it important that the rate at which we earn interest should be higher than the inflation rate

A: The inflation rate is the rate at which the price level of goods and services rises in the economy.…

Q: On January 1, 2012, Albert invested $2,000 at 5 percent interest per year for three years. The CPI…

A: The cost of living is the sum of money necessary for maintaining a particular standard of living,…

Q: The information on price and quantity of three products consumed by a typical household in the year…

A: The Consumer Price Index (CPI) is a weighted average of the prices of all goods and services that…

Question

100%

**Understanding the Impact of Inflation on Earnings**

In 1995, when the consumer price index (CPI) was 152.38, women earned a median income of $12,130 per year. To understand how inflation affects purchasing power, it's crucial to adjust this amount for changes in the CPI.

If the consumer price index in 2015 was 236.99, how much was $12,130 in 2015 dollars? Choose the correct adjusted amount from the options below:

- $18,865
- $16,259
- $12,130
- $7,799

**Explanation of the Calculation:**
To compute the equivalent amount in 2015 dollars, we use the formula for adjusting amounts for inflation:
\[ \text{Adjusted Amount} = \text{Original Amount} \times \frac{\text{CPI in 2015}}{\text{CPI in 1995}} \]
Using this formula, we can determine how $12,130 in 1995 compares to 2015, considering the changes in CPI. This helps to account for the decrease in purchasing power due to inflation over the years.

Select the correct option to fully understand the real value of median income earned by women in 1995 when expressed in 2015 dollars.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Economic General Electric paid its workers $5 a day in 1914. If the consumer price index was 10 in 1914 and 230 in 2021, how much is the GE paycheck worth in 2021 dollars?
Discuss the Price Index most commonly used in your country. How is it calculated?
The cost of a gallon of gasoline was $0.57 in 1975. If the cost of gasoline grew with inflation what would the cost be in 2021? How does this compare this to the actual cost of gasoline in 2021? Explain your answer using a meaningful sentence. CPI in 1975 was 53.8 CPI in 2021 was 270.97
The Nominal Interest rate and inflation rate in an economy is same. What will be the real interest in such case?
Britney is a baseball fan and attends several games per season. Her expenses per season are listed in the table below: Year 2 Year 1 5 Baseball $500$560 Tickets Jersey $120 $150 $150 $160 Food Transport $60 S$70 Assuming that year 1 is the base year, calculate the price index for year 1 and for year 2. 100, 113 100, 88 88, 113 88, 100
What is the Consumer Price Index (CPI)?
The CPI in December of the year 2000 was equal to 174.6. In May of 2023, the most recent month available, the CPI was 304.2. If you made $35,000 in 2000, how much income would you have to make in March of 2023 to maintain the same purchasing power? Please show your work.
Is the equilibrium level of income also the full employment level of income ?
Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one cup of coffee, one donut, and one newspaper. In year one, the basket costs $6.00. In year two, the price of the same basket is $7.00. From year one to year two, there is at an annual rate of . In year one, $12.00 will buy baskets, and in year two, $12.00 will buy baskets. This example illustrates that, as the price level rises, the value of money .
The following table shows a hypothetical situation for an economy that uses for an average household of four people a basket of only three products to calculate the consumer price index (CPI) between the years 2015 and 2018. Product Product A 20 Product B Product C 98 100 131 133 50 2015 4 Quantity Price $50 $52 $56 $100 55 $105 61 $113 $1,200 5 $1,210 5 $1,230 If the base year is 2015, what is the value of the consumer price index in 2015? (round to the closest integer) a 22 2016 P Q 23 2017 P Q $55 $111 $1,225 22 62 2018 5 P
The average price of milk per gallon was $1.85 in 1980 and $4.53 in 2017. The consumer price index was 132.4 in 1980 and 231.7 in 2017. Therefore, the real price of milk in 2017 expressed in 1980 dollars was......