Ruben Earned a Salary of $60,000 in 2001 and $80,000

question 75

Multiple Choice

Ruben earned a salary of $60,000 in 2001 and $80,000 in 2006.The consumer price index was 177 in 2001 and 221.25 in 2006.Ruben's 2001 salary in 2006 dollars is

• A)$75,000;thus,Ruben's purchasing power increased between 2001 and 2006.
• B)$75,000;thus,Ruben's purchasing power decreased between 2001 and 2006.
• C)$85,000;thus,Ruben's purchasing power increased between 2001 and 2006.
• D)$85,000;thus,Ruben's purchasing power decreased between 2001 and 2006.

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Definitions:

Physical Commodity

Tangible goods that are traded, bought, or sold, such as oil, grain, or metals.

Government Backing

The support or endorsement provided by a government to an entity, which can include financial guarantees, subsidies, or policies beneficial to the entity.

Overvalued

When the market price of an asset exceeds its intrinsic value.

Liquefied Petroleum Gas

A fuel gas made of hydrocarbons like propane and butane, used in heating appliances, cooking equipment, and vehicles.