If Your Nominal Income Is $75,000 and Your Real Income

question 84

Multiple Choice

If your nominal income is $75,000 and your real income in base year prices is $60,000, what is the
CPI?

• A)100
• B)125
• C)200
• D)250
• E)80

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Definitions:

Machine-hours

A unit of measure that indicates the amount of time a machine has been actively operating in the production process.

Least-squares Regression

A statistical method used to model the relationship between a dependent variable and one or more independent variables by minimizing the sum of the squares of the differences between observed and predicted values.

Monthly Fixed

Costs that do not change with the level of production or sales in a month, such as rent, salaries, and insurance.

Lubrication Cost

The expenses associated with lubricating machinery or equipment to ensure smooth and efficient operation.