If the CPI Equaled 1

question 117

Multiple Choice

If the CPI equaled 1.00 in 2005 and 1.65 in 2015 and a typical household's income equaled $35,000 in 1995 and $40,000 in 2005, then between 2005 and 2015, real household income:

• A)increased.
• B)decreased.
• C)was constant.
• D)may have either increased or decreased.

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Definitions:

Composition

The act of combining two functions by applying one function to the result of another.

Function

A mathematical relation in which each element of a set of inputs is associated with exactly one element of a set of outputs.

Inverse Function

A function that reverses the operation of a given function, so that if the original function applied to an input gives a certain output, the inverse function applied to that output returns the original input.

Function

A relation between a set of inputs and a set of permissible outputs, where each input is related to exactly one output.