This table shows the price-level adjustment as compared to the United States. According to the information given in the table shown, if someone makes $40,000 in the U.S., what would his salary need to be in Mexico to maintain the same standard of living?

Question

This table shows the price-level adjustment as compared to the United States.  According to the information given in the table shown, if someone makes $40,000 in the U.S., what would his salary need to be in Mexico to maintain the same standard of living?

Quizplus · Accepted Answer

According to the table, the price-level adjustment for Mexico is 0.66. This means that the cost of living in Mexico is 34% lower than in the U.S. Therefore, if someone makes $40,000 in the U.S., their salary would need to be $40,000 x 0.66 = $26,400 in Mexico to maintain the same standard of living.

This Table Shows the Price-Level Adjustment as Compared to the United