Question

The CPI in 1970 was 38.8. The CPI in 2007 was 207.3.
The purchasing power of $50,000 in 1970 was _____ the purchasing power of $200,000 in 2007.
a.
less than
b.
more than
c.
the same as
d.
not comparable to

Answer 1

b. more than

Calculation: $50,000 in 1970 in 2007 dollars = $50,000 × (207.3/38.8) ≈ $50,000 × 5.3423 ≈ $267,113, which is greater than $200,000.