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Suppose Lucy's Contract Specifies That Her Salary Will Be Increased

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Suppose Lucy's contract specifies that her salary will be increased annually with inflation, as measured by the consumer price index (CPI). Suppose the CPI rose from 110 to 121 last year. By how much would her income go up? How does accelerating inflation affect the purchasing power of her money?


Definitions:

Gap Junctions

Specialized intercellular connections that facilitate the direct transfer of ions and small molecules between the cytoplasms of adjacent cells.

Intercalated Discs

Specialized connections between myocardial cells in the heart, facilitating the synchronized contraction of cardiac tissue.

Desmosomes

Specialized cell structures that function in cell adhesion, anchoring cells to each other within tissues.

Peristalsis

The sequential muscular contractions that move food along the digestive tract.

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