Donna Newton Made $0

question 61

Multiple Choice

Donna Newton made $0.30 per hour in 1946 at a small restaurant in Clearfield,Pennsylvania.If the consumer price index (CPI) was 18.3 in 1946 and 202.4 in 2011 and the legal minimum wage in 2011 was $7.25,then

• A) Donna's inflation-adjusted wage would be greater than the legal minimum wage in 2011.
• B) Donna's inflation-adjusted wage would be less than the legal minimum wage in 2011.
• C) Donna's inflation-adjusted wage would be equal to the legal minimum wage in 2011.
• D) Donna would suffer from money illusion in 2011 if her real wage rose,holding her nominal wage constant.
• E) because of deflation in the years between 1946 and 2011,the inflation-adjusted wage would exceed the legal minimum in 2011.