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Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985

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BuyFindarrow_forward

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985
Textbook Problem

Henry Ford paid his workers $5 a day in 1914. If the CPI was 10 in 1914 and 237 in 2015, how much is the Ford paycheck worth in 2015 dollars?

To determine

Thecalculation of present worth of paycheck.

Explanation

The present value of paycheck which was $5 in 1914 which is calculated as follows:

Value of paycheck2015  =  Value of paycheck1914 × (CPI2015

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