The CPI Equals 1

question 95

Multiple Choice

The CPI equals 1.00 in year one and 1.15 in year two. If the nominal wage is $15 in year one and a contract calls for the wage to be indexed to the CPI, what will be the nominal wage in year two?

• A)$15.00
• B)$16.15
• C)$17.25
• D)$22.50

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Definitions:

Perception

The process by which individuals organize and interpret their sensory impressions to give meaning to their environment.

Synthesize

To combine various elements or ideas into a coherent and unified whole, often generating new insight or understanding.

Perceptual Selection

The psychological process by which individuals screen and select various stimuli that vie for their attention, filtering out some data while allowing other data to enter perception.

Contrast

The state of being strikingly different from something else in juxtaposition or close association.