What is the Impact of CPI on Real Salary Calculations?

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Homework Help Overview

The discussion revolves around the impact of the Consumer Price Index (CPI) on real salary calculations, specifically focusing on how to adjust yearly income figures based on CPI values to determine real salaries over several years.

Discussion Character

  • Exploratory, Assumption checking

Approaches and Questions Raised

  • The original poster attempts to calculate real salaries based on provided income and CPI data but expresses uncertainty about the correctness of their calculations and seeks assistance for a subsequent part of the problem.
  • Some participants question the methodology of adjusting income by the percent change in CPI and discuss whether the adjusted salaries indicate that income has kept pace with inflation.

Discussion Status

Participants are exploring the calculations and interpretations of the data. Some guidance has been offered regarding the approach to part (b) of the problem, suggesting that the adjusted salaries should not decrease if they keep pace with inflation.

Contextual Notes

The original poster has attached a file with the question details, but specific constraints or additional information regarding the homework assignment are not mentioned in the discussion.

lms
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I need HELP (new)

a)
yearl income CPI Real Salary (my answer)

1999 20,500 98.5 20,812.18
2000 21,100 100.0 21,100.00
2001 21,400 102.8 20,817.12
2002 22,000 105.5 20,853.08
2003 22,300 109.7 20,328.17
2001 22,900 116.0 19,741.38

i am not sure i do it is right or wrong, and i haven't idea to do (b)
anyone can help me to solve the problem?
the question attach on the file.
 

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You're not likely to find many economists on this board. Maybe someone who has taken some economics courses is around, but help may be slow in arriving for these types of questions.

That said, if all you're supposed to do is adjust the income by the percent change in CPI, which is what you've done and I think is correct, then part (b) seems to be a rather straightforward question based on your answers to part (a). Just look at your answers and see if the salary has kept up with inflation.
 
lms said:
a)
yearl income CPI Real Salary (my answer)

1999 20,500 98.5 20,812.18
2000 21,100 100.0 21,100.00
2001 21,400 102.8 20,817.12
2002 22,000 105.5 20,853.08
2003 22,300 109.7 20,328.17
2001 22,900 116.0 19,741.38

i am not sure i do it is right or wrong, and i haven't idea to do (b)
anyone can help me to solve the problem?
the question attach on the file.
Your numbers for a look good. For b if the sarary keep pace with inflation the adjusted salary does not go down, but you see it does do down so the complaint is justified.
 
thanks so much of your help.