According to the U.S. Census Bureau (www.census.gov), the median household incom

Question

According to the U.S. Census Bureau (www.census.gov), the median household income in the United States was $23,618 in 1985, $34,076 in 1995, $46,326 in 2005, and $49,276 in 2010. In purchasing power terms, how did family income compare in each of those four years?

You will need to know that the CPI (multiplied by 100, 1982–1984 = 100) was 107.6 in 1985, 152.4 in 1995, 195.3 in 2005, and 218.1 in 2010.

Instructions: Enter your responses rounded to two decimal places.

Year

Real Income

1985

$

1995

$

2005

$

2010

$

Between 1985 and 2005, the real median household income : EITHER

a.rose

b.declined

c.stayed constant.

Between 2005 and 2010, the real median household income (Click to select)

a.stayed constant

b.rose

c.declined.

than the values computed above

Year

Real Income

1985

$

1995

$

2005

$

2010

$

Explanation / Answer

(1) Real Income = Nominal income / CPI

So, real income year-wise ($):

1985 = 23,618 / 1.076 = 21,949.81

1995 = 34,076 / 1.524 = 22,359.58

2005 = 46,326 / 1.953 = 23,720.43

2010 = 49,276 / 2.181 = 22,593.31

(2) Between 1985 and 2005, real median income increased.

(3) Betwen 2005 & 2010, real medium income declined.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.