Answer:
Maria is more keeping up with inflation because her salary has increased by a percentage rate (12%) that is higher that the inflation rate (10%)
Explanation:
To determine who is keeping up with inflation more, we would compare the percentage in the salaries to the inflation rate
Inflation rate = (CP1 in year 2/CPI in year 1) × 100
= (154/140) × 100
= 10%
Change in salary =
(Current salary - previous salary)/previous salary× 100
Maria
= (48,000 - 43,000)/43,000 × 100
= 12%
Daisy's
= (70,000- 65,000)/65,000× 100
= 8%
Maria is more keeping up with inflation because her salary has increased by a percentage rate (12%) that is higher that the inflation rate (10%)
Answer:
Who is "more than keeping up with inflation"?
Explanation:
the person who is more than keeping up with inflation is the one that has the highest salary raise between years 1 and 2. We must first determine the real salaries of year 1 and 2, and then determine how much they increased:
Maria's nominal salary Maria's real salary % change
Year 1 $43,000 =$43,000/1.4 = $30,714.29
Year 2 $48,000 =$48,000/1.54 = $31,168.83 1.45%
Daisy's nominal salary Maria's real salary % change
Year 1 $65,000 =$65,000/1.4 = $46,428.57
Year 2 $70,000 =$70,000/1.54 = $45,454.55 -2.1%
Maria actually got a 1.45% increase in her real wage, while Daisy lost money, since her real wage decreased by 2.1%.
