Your grandfather tells you he earned $0.65 per hour at his job when he was a boy in 1929.Given that the CPI was 17.1 in 1929 and 215.3 in 2008,how much would you have had to make in 2008 to have the same real hourly wage as your grandfather?

Question

Quizplus · Accepted Answer

To find the equivalent real hourly wage in 2008, we need to adjust the 1929 wage for inflation using the CPI values provided. The inflation factor between 1929 and 2008 can be found using the formula:

Inflation factor = CPI in 2008 / CPI in 1929

In this case, the inflation factor is:

Inflation factor = 215.3 / 17.1 = 12.59

This means that prices in 2008 were, on average, 12.59 times higher than in 1929. To find the equivalent real hourly wage in 2008, we can simply multiply the 1929 wage by the inflation factor:

Real hourly wage in 2008 = 0.65 x 12.59 = $8.18

Therefore, the correct answer is (C) $8.18.

Your Grandfather Tells You He Earned $0