In Questions make the assumption that the change in housing prices exactly matches the change in the CPI. In fact, housing is only part of the CPI, and figures into the CPI through rents rather than sale prices, so this assumption may be far from correct.
-Zeke bought a house in 1981 for $19,000 and sold it in 1997. If the 1981 CPI is 90.9 and the 1997 CPI is 160.5, how much would the house be worth in 1997 dollars?
A) $26,300
B) $27,860
C) $29,808
D) $33,548

Question

Quizplus · Accepted Answer

To find the equivalent value in 1997 dollars, use the formula: (1997 CPI / 1981 CPI) * 1981 price. This gives (160.5 / 90.9) * $19,000 = $33,548.

In Questions Make the Assumption That the Change in Housing