PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
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Question
Chapter 6, Problem 6.5CC
To determine
Compare the bond’s real earning relative to real salaries.
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Michael Jordan Earned $30,100,000 playing for the Chicago Bulls in 1997. In 1997 the CPI was
equal to 1.60. In 2020 LeBron James earned $37,400,000 playing for the Los Angeles Lakers. The
CPI in 2020 is equal to 2.58. Calculate the real wage for Micheal Jordan in 1997 and Lebron James
in 2020.
Please enter your answers as numeric answers rounded to the nearest dollar with no decimals (ie.
15,553,342 or $10,432,675 not $15,553,341.73 or $10,432,675.2). Because these will be large
numbers it is a good idea to use commas to separate millions, thousands, and hundreds.
What was the real wage for Michael Jordan in 1997?
What is the real wage for LeBron James in 2020?
Frank agrees to lend his friend Sammy $1000 for one
year so that Sammy can buy a new computer. Suppose
at the beginning of the loan, the CPI was 2.25. At the
end of the loan, when Franki was repaid, the CPI was
2.3. What nominal rate should Frank have charged if he
wanted to receive a 0% real return?
a) 3.1%
b) 2.2%
c) 1.6%
The CPI’s basket of goods includes potato chips, over half of which are made from potatoes grown in Idaho. Wildfires this summer destroyed acres of potato crops in Idaho, causing a spike in the price of potatoes, and there was a 30% increase in the price of potato chips. As a result, the CPI calculation showed an increase of 2% in the Fall of this year versus last year. Please explain if this 2% increase is reflective of the overall price level, and if not, why?
Chapter 6 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
Ch. 6 - Prob. 1RQCh. 6 - Prob. 2RQCh. 6 - Prob. 3RQCh. 6 - Prob. 4RQCh. 6 - Prob. 5RQCh. 6 - Prob. 6RQCh. 6 - Prob. 7RQCh. 6 - Prob. 8RQCh. 6 - Prob. 1PCh. 6 - Prob. 2P
Ch. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Prob. 7PCh. 6 - Prob. 8PCh. 6 - Prob. 9PCh. 6 - Prob. 10PCh. 6 - Prob. 6.1CCCh. 6 - Prob. 6.2CCCh. 6 - Prob. 6.3CCCh. 6 - Prob. 6.4CCCh. 6 - Prob. 6.5CCCh. 6 - Prob. 6.6CCCh. 6 - Prob. 6.7CCCh. 6 - Prob. 6.8CCCh. 6 - Prob. 6.9CC
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- In year 1, your annual income is 45,000 and the CPI is 143.6; in year 2, your annual income is 51,232 and the CPI is 150.7. Has your real income risen, fallen, or remained constant? Explain your answer.arrow_forwardThe consumer price index (CPI) rose from 105.9 to 113.4, while Helen's net salary decreased 7.0 %. Calculate the relative real change in Helen's salary (purchasing power) as percentage.arrow_forward1) Answer the Questions below a) Your father tells you he earned $1.50 per hour when he was 16 in 1969; you made $6.00 per hour when you were 16 in 2006. Given that the CPI was 36.7 in 1969 and 201.6 in 2006, what is the 2006 current equivalent of your father’s (1969) hourly earnings when he was 16? b)Name ONE of the groups in society that is likely to be hurt by inflation.arrow_forward
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