On goods and services, Harry spent $32,000 in 2004 and $39,000 in 2009. The consumer price index was 192 for 2004 and 217 for 2009. Harry's 2009 spending in 2004 dollars is about

Question

Quizplus · Accepted Answer

To find Harry's 2009 spending in 2004 dollars, we need to adjust for inflation using the consumer price index (CPI). The CPI for 2004 is 192, and the CPI for 2009 is 217. This means that the cost of goods and services increased by (217 - 192) / 192 * 100 = 13.02% from 2004 to 2009.To adjust Harry's 2009 spending to 2004 dollars, we need to divide it by (1 + 13.02%). This gives us $39,000 / (1 + 0.1302) = $34,507.Therefore, Harry's 2009 spending in 2004 dollars is about $34,507.

On Goods and Services, Harry Spent $32,000 in 2004 and $39,000