The Table Shown Displays Yearly Salaries and the CPI Across

question 113

Multiple Choice

The table shown displays yearly salaries and the CPI across five decades. How can we compare the real value of the 1979 salary to the salary earned in 2019?

• A) The 1979 salary must be subtracted from the 2019 salary as shown in the table.
• B) The 2019 salary must be put into real 2019 terms to compare it to the 1979 salary.
• C) Both salaries must be put into real dollars in the same year for comparison.
• D) There is no real way to compare the two salaries without more information.

---

Definitions:

Price Floor

A price floor is a government-imposed minimum price set above the equilibrium price for a product or service, aimed to ensure producers receive a fair return.

Surplus

The situation in which the quantity of a good produced exceeds the quantity demanded, often leading to a decrease in prices.

Production

The method of producing products and services by merging work, materials, and technology.

Inefficient Allocations

Situations where resources are not optimally distributed, often leading to waste or unmet potential within an economy or system.