MrHussein Was Paid $8 an Hour in 1989,the Base Year

question 97

Essay

Mr.Hussein was paid $8 an hour in 1989,the base year.In 1996,the CPI stood at 120 and he was earning $12 an hour.How much were Mr.Hussein's real wages in 1996 and by what percentage had they changed since 1989?

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Definitions:

Family Income

The total amount of money earned by members of a family, typically measured annually.

Negative Income Tax

A welfare system that provides income support by offering a direct transfer of funds to individuals whose income falls below a certain threshold.

Tax Revenue

The revenue that governments acquire from taxes.

Capitalism

An economic system characterized by private ownership of the means of production, where investments, production, distribution, income, and prices are determined mainly by competition in a free market.