Question

In 2008, Cameron began his career with SBC. His starting salary was $32,000. By 2012, his salary increased to $35,000. If the CPI was 100.0 in 2008 and 107.5 in 2012, Cameron's 2012 real income is Question 40 options: $32,000.

Answer 1

Based on the CPI in 2008 and 2012, Cameron's 2012 real income is $34,400.

What is real income?

The real income is the inflation-adjusted income.  It is not the same as the nominal income.

For instance, Cameron's nominal income in 2012 is $35,000, but the inflation-adjusted (CPI) real income should be $34,400 based on his starting salary of $32,000 in 2008.

Data and Calculations:

Starting salary in 2008 = $32,000

Salary in 2012 = $35,000

Consumer Price Index (CPI) in 2008 = 100.0

Consumer Price Index (CPI) in 2012 = 107.5

CPI adjusted salary in 2012 should be (real income) = $34,400 ($32,000 x 107.5/100.0)

Thus, based on the CPI in 2008 and 2012, Cameron's 2012 real income is $34,400.

Learn more about CPI and real income at brainly.com/question/24802187