Answered: 3. Comparing salaries from different…

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Measuring The Cost Of Living

Section: Chapter Questions

Problem 9PA

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3. Comparing salaries from different times

Consider golfers who led the Professional Golfers’ Association of America (PGA) in winnings at different points in time. Note that the winnings are nominal figures (unadjusted for inflation).

To convert the original earnings of Nelson, Nicklaus, and Pavin, use the formula for converting dollar figures from an earlier era into year 2016 U.S. dollars. Using those figures, fill in the following table, making sure to round your responses to the nearest U.S. dollar.

Year	Golfer	Nominal Winnings	U.S. CPI	Winnings in 2016 Dollars
(Dollars)	(1983 = 100)
1945	Byron Nelson	63,336	18	264
1973	Jack Nicklaus	308,362	44.4
1991	Corey Pavin	979,430	136.2
2016	Dustin Johnson	9,365,185	240.0	9,365,185

True or False: According to the previous table, the golfer with the highest PGA winnings in nominal dollars is the same as the golfer with the highest PGA winnings after adjusting for inflation.

True

False

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