Loretta is offered a job in St.John's that pays $50,000.She is also offered a job in Halifax that pays $62 250.Which set of CPIs comes closest to giving both salaries the same purchasing power?

Question

Quizplus · Accepted Answer

To calculate the purchasing power of each salary in terms of the other city's CPI, we divide the salary by the corresponding CPI and then multiply by 100. For the St.John's salary of $50,000, we get a purchasing power of $60,048.05 in Halifax using the CPI of 124.5. For the Halifax salary of $62,250, we get a purchasing power of $50,000 using the CPI of 100 in St.John's. The set of CPIs that come closest to giving both salaries the same purchasing power is therefore 100 in St.John's and 124.5 in Halifax, which is choice C.

Loretta Is Offered a Job in St