The Consumer Price Index (CPI)equals 100 in Year One and 105

question 149

Multiple Choice

The consumer price index (CPI) equals 100 in year one and 105 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) $14.29.
• B) $15.00.
• C) $15.05.
• D) $15.75.
• E) $16.05.

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Definitions:

U.S. Dollars

The official currency of the United States, which is used as a standard monetary unit for various international transactions.

Foreign Trade Zone

A designated location within a country where goods can be imported, stored, and processed without being subject to import duties until they enter the domestic market.

U.S. Customs Territory

Refers to the geographic area where U.S. laws, especially those related to import duties and tariffs, are in full effect.

Duty Rate

The tax imposed on imports and exports, usually calculated as a percentage of the value.