Keveen Efe Posted February 9, 2018 Report Share Posted February 9, 2018 (edited) Year Wage CPI 2011 $18,000 120.73 2017 $56,000 232.15 With the above data, can you calculate the Purchasing Power of the worker as a result of an increase in wage from 18,000 to 56000? And also give interpretation of the result. Thank you in advance. Edited February 9, 2018 by Keveen Efe incomplete Quote Link to comment Share on other sites More sharing options...
StrictlyLogical Posted February 9, 2018 Report Share Posted February 9, 2018 Is this for a school project or assignment? I would hesitate to just hand out the answer. First ask yourself what IS purchasing power? What units would you use to even quantify such a thing? Next think about what CPI is and what is the consequence of prices increasing per dollar... how is this related to purchasing power as you defined it above. Can you quantify a change in purchasing power per dollar (as a ratio)? Finally, given your conclusions thus far regarding purchasing power per dollar... what does the increase in wage mean (proportionally speaking)? So, in conclusion, what is the Purchasing power of the worker in 2017 versus 2011 given both changes in CPI and wage (expressed as a ratio)? Quote Link to comment Share on other sites More sharing options...
Invictus2017 Posted February 10, 2018 Report Share Posted February 10, 2018 That $18,000 figure for 2011 is definitely not correct. (And if we're talking Nigeria, I seriously doubt that either figure is correct.) It would also be a good thing to think about the premises behind the CPI and ask whether it is a useful or even accurate measure of whatever it is supposed to measure. Quote Link to comment Share on other sites More sharing options...
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