Thomas earned a salary of $50,000 in 2001 and $70,000 in 2006.The consumer price index was 177 for 2001 and 265.5 for 2006.Thomas's 2001 salary in 2006 dollars is

Question

Quizplus · Accepted Answer

To calculate the inflation-adjusted salary for 2001 in 2006 dollars, we need to use the following formula:

Inflation-adjusted salary in 2006 dollars = (Nominal salary in 2001 dollars x 2006 CPI) / 2001 CPI

Plugging in the values, we get:

Inflation-adjusted salary in 2006 dollars = ($50,000 x 265.5) / 177
Inflation-adjusted salary in 2006 dollars = $75,000

Therefore, Thomas's 2001 salary in 2006 dollars is $75,000. The correct answer is C.

Thomas Earned a Salary of $50,000 in 2001 and $70,000