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Alja [10]
3 years ago
6

Babe Ruth was a famous baseball player in the 1920s. He made a salary of $80,000 in 1930, which was considered outrageous becaus

e it was more than President Hoover made ("I had a better year than he did" was Ruth's supposed response). Nowadays, baseball players make much more than $80,000; the average major league salary in 2017 is $4.47 million per year, and the highest salary is $33 million for Clayton Kershaw. Some of the difference in salaries between Babe Ruth and today's players is due to inflation, and some of it is due to the fact that major league players make more in real terms today, because the market for baseball has grown over times and because players have gotten a higher share of the baseball pie over time because they have a powerful union How much of the difference is due to inflation? What is Babe Ruth's 1930 salary in today's dollars? You can use the same "index method" formula that we used to convert nominal GDP to real GDP in class. There are various websites that show the Consumer Price Index for various years.
Business
1 answer:
ArbitrLikvidat [17]3 years ago
4 0

Answer:

In real dollars, Babe Ruth's salary = $80,000 / 0.0645 (CPI 1930) = $1,240,000

Since Babe Ruth was the highest paid baseball player back then, if we compare his updated salary to Kershaw's salary, it represents only = $1,240,000 / $33,000,000 = 3.76%.

That means that most of the players' salary raise was due to other factors, not just inflation.

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4 years ago
Which of the following statements are true? (plato)
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Which of the following statements are true? (plato)

A. Economic stability means fair distribution of goods in an economy.

B. Full employment is a macroeconomic goal.

C. Inflation is a fall in the prices of goods and services.

D. Inflation is a rise in the prices of goods and services.

E. Microeconomics studies the economy as a whole.

The bold choices are the true statements from this question. C in incorrect because D. is correct, inflation is defined as the rise in prices and goods and services. These goods and services inflat as the economy rises.

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4 0
3 years ago
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Answer:

The marginal revenue product has a property known as diminishing marginal return.

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Assume you are running a paid campaign and your original budget was $50,000 for the month. It's a 31-day month and you have spen
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The original budget was $50,000 for the month, $20,000 has been spent already after which there was a revision of the monthly budget to $75,000.

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= $55000

Also, the money was spent for 11 days, therefore the number of days remaining will be:

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= 20 days.

Therefore, the new daily budget for the month will be:

= $55,000 / 20 days

= $2,750

8 0
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zylo inc preferred stock pays a 7.50 annual dividend. What is the maximum price you are willing to pay for one share of this sto
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