Scott worked in a large foreign country. He retired in 2008 and his pension income is fixed at $1,500 per month. The table above gives the CPI in this country. What is the real monthly value of his pension in the years between 2008 and 2011?
What will be an ideal response?
To calculate the real value of the pension, divide the $1,500 pension by the CPI and then multiply by 100. This calculation gives the real values as: 2008, $1,500.00; 2009, $1,463.41; 2010, $1,415.09; 2011: $1,351.52.
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Budgets deficits can be a concern because they might
A) ultimately lead to higher inflation. B) lead to lower interest rates. C) lead to a slower rate of money growth. D) lead to higher bond prices.
Suppose that the Beltrand family owns a farm near San Angelo, Texas. Three options exist for how to best use the farm:
Option 1: Raise lambs and earn a profit of $425,000. Production expenses are $200,000. Option 2: Raise cattle and earn a profit of $475,000. Production expenses are $400,000. Option 3: Grow cotton and earn a profit of $600,000. Production expenses are $300,000. Which option should the Beltrand family undertake and what is the opportunity cost in this decision? A) Option 2, $425,000 B) Option 1, $600,000 C) Option 3, $475,000 D) None of the above