# Adjusting Wages for the Inflation Rate Video

Instructions:

question 1 of 3

### Melissa has a choice between two jobs. The first is a job is in New York City with a salary of \$90,000. The other job has a salary of \$80,000 per year salary in Boise, Idaho. Let's assume that the CPI is 120 in New York, while the CPI is 100 in Boise. If Melissa wants to maximize her 'real wage', which job should she choose?

Create Your Account To Take This Quiz

As a member, you'll also get unlimited access to over 79,000 lessons in math, English, science, history, and more. Plus, get practice tests, quizzes, and personalized coaching to help you succeed.

Try it risk-free for 30 days. Cancel anytime

### 2. In year one, a worker's nominal wage is \$25,000, and the CPI is 100. The following year, the worker's nominal wages stay the same, but the CPI is 105. In order to calculate the worker's real wage in year two, what needs to be done?

Create your account to access this entire worksheet
Quizzes, practice exams & worksheets
Certificate of Completion
Create an account to get started

How and why should inflation be considered when determining wage changes from year to year? This quiz and corresponding worksheet will test your ability to apply necessary formulas to answer questions about this topic.

## Quiz and Worksheet Goals

In these assessments, you'll be tested on:

• The application of the Consumer Price Index (CPI) to determine real wages in different parts of the country
• How to determine real wages over a specific period
• How to calculate real wages when a salary remains the same but the CPI changes
• How to determine purchasing power

## Skills Practiced

This worksheet and quiz will allow you to test the following skills:

• Reading comprehension - ensure that you draw the most important information about the inflation rate
• Critical thinking - apply relevant concepts to examine information about wages in a different light
• Interpreting information - verify that you can read examples of how to calculate real wage and interpret them correctly
• Problem solving - use acquired knowledge to solve wage-related practice problems