The consumer price index (CPI), with a base of 1982-84, increased from 219.40 in 2010 to 257.00 in 2019. Thecorresponding increase in the producer price index (PPI) was from 177.80 in 2010 to 189.20 in 2019.a. Use the appropriate price index to compute John's percentage change in real income if his (nominal) income increasedfrom $53,000 in 2010 to $69,000 in 2019. (Round your answer to 2 decimal places.)b. Use the appropriate index to compute the percentage change in real revenue of John's company if the nominalincrease was from $14.2 million in 2010 to $15.8 million in 2019. (Round your answer to 2 decimal places.)

a. To compute John's percentage change in real income, we need to use the Consumer Price Index (CPI)…

Answered: The consumer price index (CPI), with a…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter15: Measuring A Nation's Income

Section: Chapter Questions

Problem 5PA

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1
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