Suppose the CPI in 1950 was 24.1 and the CPI in 1975 was 53.8. When Ken's income rose from $10,000 per year in 1950 to $20,000 per year in 1970, Ken's standard of living improved between 1950 and 1970.

Question

Suppose the CPI in 1950 was 24.1 and the CPI in 1975 was 53.8.​ When Ken's income rose from $10,000 per year in 1950 to $20,000 per year in 1970, Ken's standard of living improved between 1950 and 1970.

Quizplus · Accepted Answer

Ken's income doubled, but the CPI more than doubled, indicating that the cost of living increased faster than his income, reducing his purchasing power and standard of living.

Suppose the CPI in 1950 Was 24