If the CPI equaled 1.00 in 2005 and 1.65 in 2015 and a typical household's income equaled $35,000 in 1995 and $40,000 in 2005, then between 2005 and 2015, real household income:
A)increased.
B)decreased.
C)was constant.
D)may have either increased or decreased.

Question

Quizplus · Accepted Answer

Household real income fell because real income was $35,000 ($35,000 / 1.00)in 2005 and only $24,242 ($40,000 / 1.65)in 2015.

If the CPI Equaled 1