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Suppose Mack's wage was $7.00 an hour in 2001 and was $12.00 per hour in 2012. The CPI was 94 in 2001 and 201 in 2012. The 2001 wage in terms of 2012 dollars is
A) $14.97.
B) $14.07.
C) $3.48.
D) $13.16.
E) $7.00.

Respuesta :

The wage of 2001 in terms of wage in 2012 is option A $14.97

Given,

Mack's wages in 2001 = $7 per hour

Mack's wages in 2012 = $12 per hour

The CPI in 2001 = 94

The CPI in 2012 = 201

We have to fins the wage of 2001 in terms of wage in 2012;

CPI;- Consumer Price Index

The CPI is calculated by the Bureau of Labor Statistics each month using a sample of 94,000 prices. To determine the overall change in prices, the index for each good or service is weighted according to its share of recent consumer spending.

Here,

The wage of 2001 in terms of wage in 2012 = (CPI in present year / CPI in past year) x Wage of earlier year

= (201 / 94) x 7

= 14.97

That is,

The wage of 2001 in terms of wage in 2012 is option A $14.97

Learn more about wages here;

https://brainly.com/question/11436134

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