Question

Quinn has job offers in Wrexington and across the country in Charlieville. The Wrexington job would pay a salary of $50,000 per year, and the Charlieville job would pay a salary of $40,000 per year. The CPI in Wrexington is 150, and the CPI in Charlieville is 90.Refer to Scenario 24-4. The Wrexington salary in Charlieville dollars is:_______.a. $30,000.00.b. $33,333.33.c. $45,000.00d. $83,333.33.

Answer 1

Answer:

a) $30, 000

Explanation:

The Consumer price index is the weighted average of the cost of basket of good of goods and services consumed by a typical consumer in an economy. It is used to measure the rate of inflation rate.

The salary in Wrexington in Charlieville dollars=

(CPI in Charlieville / CPI in Wrexington)×  Wrexington Salary

= (90/150)×  $50,000

=$30, 000