Scenario 24-2
The price tag on a golf ball in 1975 read $0.20,and the price tag on a golf ball in 2005 read $2.00.The CPI in 1975 was 52.3,and the CPI in 2005 was 191.3.
-Refer to Scenario 24-2.In 1975 dollars,a 1975 golf ball cost $0.20 and a 2005 golf ball cost

Question

Quizplus · Accepted Answer

To adjust the price of a 2005 golf ball to 1975 dollars, we need to use the CPI ratios. The CPI ratio in 2005/1975 is 191.3/52.3 = 3.655. Therefore, in 1975 dollars, the price of a 2005 golf ball would be $2.00/3.655 = $0.55, which is less than the price of a 1975 golf ball ($0.20). Therefore, golf balls were cheaper in 1975.

Scenario 24-2 The Price Tag on a Golf Ball in 1975 Read