Pearson eText Economics of Money, Banking and Financial Markets, The, Business School Edition -- Instant Access (Pearson+)
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Chapter 24, Problem 1WE
To determine

To Calculate:

Using the inflation calculator, the following things need to be calculated:

  1. The cost of a new house in 1950 whose price in 2017 is $125000.
  2. The average annual household income in 1945 if in 2017 the income stood at about $50,000.
  3. The cost of an average new car in 1945 which is about $25,000 in 2017.
  4. Using the results from the above determine whether purchase of a new car consumed a greater portion of household income in 2017 or in 1945.

Concept introduction:

Inflation: Continuous rise in the general price level of goods and services over a period in an economy.

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