Your father tells you he earned $2.00 per hour when he was 16 in 1969;you remember making $10.00 per hour in 2003.Given that the CPI was 36.7 in 1969 and 184.0 in 2003,how does your father's 1969 wage (measured in 2003 dollars)compare with your wage in 2003?
A)Your real wage was more than four times your father's.
B)You made about $1.00 more in real wages than your father.
C)The real wages of you and your father were about equal.
D)The real wages of your father were about $1.00 more than yours.

Question

Quizplus · Accepted Answer

To compare the wages, adjust your father's 1969 wage to 2003 dollars using the CPI: $2.00 * (184.0 / 36.7) = $10.03. This is approximately equal to your 2003 wage of $10.00.

Your Father Tells You He Earned $2