Mark Has a Two-Year Wage Contract with His Employer

question 40

Multiple Choice

Mark has a two-year wage contract with his employer. Mark's wage contract specifies a $50,000 salary for the first year, and a salary increase equal to the percentage increase in the CPI during the second year. The percentage increase in the CPI during the year was 4.0 percentage points. If the CPI overstates inflation by 1.0 percentage point, at the end of the first year Mark's salary increased by ________ more than it would have without the upward bias.

• A) $500
• B) $1500
• C) $50
• D) $3000
• E) $2000

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Definitions:

Guardian Ad Litem

A person appointed by the court to represent the interests of a child or mentally incompetent person before the court.

Appointed

Officially designated or chosen to fill a position or role.

Visitation Rights

The right of a noncustodial parent to have contact with his or her child. Grandparents and stepparents may also be given visitation rights.

Noncustodial Parent

The parent who does not have primary legal or physical custody of a child but may have visitation rights or pay child support.