When Comparing the Buying Power of a Salary Offer of $52,000

question 2

Multiple Choice

When comparing the buying power of a salary offer of $52,000 in Boston with a $49,000 offer in Los Angeles,the Boston salary offer would buy ____ of goods and services in Los Angeles,assuming the index was 130.6 for Boston and 114.9 for Los Angeles.

• A) ​$55,695
• B) ​$45,748
• C) ​$43,109
• D) ​$59,105

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Definitions:

Exercise Price

The price at which the holder of an option can buy (call) or sell (put) the underlying asset.

Municipal Bond

A debt security issued by municipalities to finance public projects, often tax-exempt for investors.

Marginal Tax Bracket

The tax rate that applies to the last dollar of the taxpayer's income, indicating the percentage of tax applied to their highest level of income.