In 1970,Professor Plum earned 12,000 dinars; in 1980,he earned 24,000; and in 1990,he earned 36,000.If the CPI was 40 in 1970,60 in 1980,and 100 in 1990,then in real terms,Professor Plum's salary was highest in

Question

Quizplus · Accepted Answer

To compare real salaries, adjust for inflation using the CPI. In 1970, real salary = 12,000/40 = 300. In 1980, real salary = 24,000/60 = 400. In 1990, real salary = 36,000/100 = 360. Thus, the real salary was highest in 1980 and lowest in 1970.

In 1970,Professor Plum Earned 12,000 Dinars; in 1980,he Earned 24,000;