This is an inflate and deflate exercise using the Consumer Price Index, which ca

Question

This is an inflate and deflate exercise using the Consumer Price Index, which can be found on www.inflationdata.com. This assignment is worth 50 points. Please put your answers on a separate sheet of paper. 1. 1- Find the CPI month you were born and record this, find the CPI for December 2012 and record this. 2. 2- Inflate the average home price value of $51,500 in December 1978 to December 2012. 3. 3-The minimum wage was $1.60 in 1972, find the CPI for December 1972 and inflate the minimum wage to December 2012. a. Deflate the current minimum wage to December 1972. 4. 4-Take the current minimum wage, and deflate it to 1950, who has the highest value, those working in 1950, or those working in 2012? 5. 5-If a person is earned $54,500 in 2012, what is the equivalent dollar value in 2002, 1982, 1962? 6. 6- I purchased a car in May 1973 for $3,125, what is the equivalent purchase price in December, 2012? a. A new car purchased today for $23,500 is equivalent to what purchase price in December 1995? 7. 7-In March 2011, I purchased a new home in Butte for $215,000, what would this price have been if purchased 25 years earlier in March 1976. 8. 8- I purchased a home in Butte for $93,000 in September 2009. What would this house price have been in September 1919 or 90 years earlier? 9. 9- If a person earned $45,000 in 1990, inflate this wage to December 2012 to determine the equivalent value. If a person earned $45,000 in 2012, what is this equivalent to in December 1990? 10. 10-The average college graduate left school with $8,500 of student loan debt in 1989, what is this equal to in 2012 dollars? 11. 11-According to CNN, the average 2012 graduate has student loan debt of $27,000, deflate this figure to May 1989, and determine who had the largest student loan upon graduation. The graduate of 1989 or the graduate of May, 2012?

Explanation / Answer

answer isat How to Use Price Indexes - Department of Agricultural Economics ... www.agecon.purdue.edu/crd/localgov/essays/priceind.htm

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