If your nominal income is $80,000 and your real income in base year prices is $71,500, what is the cpi?

Question

Elisabeth Gregory

Business

14 August, 14:03

If your nominal income is $80,000 and your real income in base year prices is $71,500, what is the cpi?

+3

Answers (1)

Know the Answer?

Mariam Farley · Answer 1

The consumer price index would change in concert with the real value of the income that the consumer has. In this case, the nominal value is 80,000 with a real value of only 71,500. Taking these two values and dividing them gives a quotient of 1.118, which is rounded up to 1.12, multiplied by 100 to give a CPI of 112.