If the total expenditures of a typical family equaled $35,000 per year in 2010 and the exact same basket of goods and services cost $40,000 in the year 2015, the family's cost of living:
A)increased by 14 percent.
B)decreased by 12.5 percent.
C)decreased by 14 percent.
D)increased by 12.5 percent.

Question

Quizplus · Accepted Answer

The cost of living increased by 14 percent because the increase from $35,000 to $40,000 is calculated as ($40,000 - $35,000) / $35,000 * 100% = 14.29%, which rounds to 14%.

If the Total Expenditures of a Typical Family Equaled $35,000