Suppose your nominal income goes from $20,000 in year 1 to $X in year 2. Suppose the CPI
was 100 in year 1 and 150 in year two. How much should X be so that your real income remains the same?
(a) 25,000
(b) 30,000
(c) 20,000
(d) 40,000

Q&A Education