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Atlanta, GA has a CPI of 168. Seattle, WA has a CPI of 204. How does the purchasing power of an Atlanta resident
earning a $32,800 salary compare to the purchasing power of a Seattle resident earning a $46,400 salary?
a. The Atlanta resident has $34.46/CPI more than the Seattle resident.
b. The Atlanta resident has $83.20/CPI more than the Seattle resident.
The Seattle resident has $48.74/CPI more than the Atlanta resident.
d. The Seattle resident has $32.21/CPI more than the Atlanta resident.
Please select the best answer from the choices provided
A
B
D
Previous Activity

Sagot :

Answer:

D

Step-by-step explanation:

Ege 2021

The Seattle resident should be considered  $32.21/CPI when it is  more than the Atlanta resident.

What is the consumer price index?

It is applied for determining the inflation.

For comparing the purchasing power here first we have to adjust the income with respect to inflation and then divide the incomes

So it can be like

Real income of the person from Atlanta =  [tex]$32,800 / 168[/tex] = 195.24

Real income of the person from Seattle = [tex]$46,400 / 204[/tex] = 227.45

So,

Difference in real income should be

= 227.45  195.24

= $32.21

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