Business, 07.04.2020 23:39 avision42

In year 1 the CPI is 140, and in year 2 the CPI is 154. From year 1 to year 2, Maria's salary rises from $43,000 to $48,000, and Daisy's salary rises from $65,000 to $70,000. Who is "more than keeping up with inflation"?

Answers: 3

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Answers

Maria is more keeping up with inflation because her salary has increased by a percentage rate (12%) that is higher that the inflation rate (10%)

Explanation:

To determine who is keeping up with inflation more, we would compare the percentage in the salaries to the inflation rate

Inflation rate = (CP1 in year 2/CPI in year 1) × 100

= (154/140) × 100

= 10%

Change in salary =

(Current salary - previous salary)/previous salary× 100

Maria

= (48,000 - 43,000)/43,000 × 100

= 12%

Daisy's

= (70,000- 65,000)/65,000× 100

= 8%

Maria is more keeping up with inflation because her salary has increased by a percentage rate (12%) that is higher that the inflation rate (10%)

Answer from: Axe15x

Who is "more than keeping up with inflation"?

Maria

Explanation:

the person who is more than keeping up with inflation is the one that has the highest salary raise between years 1 and 2. We must first determine the real salaries of year 1 and 2, and then determine how much they increased:

Maria's nominal salary Maria's real salary % change

Year 1 $43,000 =$43,000/1.4 = $30,714.29

Year 2 $48,000 =$48,000/1.54 = $31,168.83 1.45%

Daisy's nominal salary Maria's real salary % change

Year 1 $65,000 =$65,000/1.4 = $46,428.57

Year 2 $70,000 =$70,000/1.54 = $45,454.55 -2.1%

Maria actually got a 1.45% increase in her real wage, while Daisy lost money, since her real wage decreased by 2.1%.

Answer from: Quest

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Answer from: Quest

the answers are

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In year 1 the CPI is 140, and in year 2 the CPI is 154. From year 1 to year 2, Maria's salary rises...

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