3) The federal minimum wage in May of 1975 was $2.10 per hour. Forty years later,...

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3) The federal minimum wage in May of 1975 was $2.10 per hour. Forty years later, the federal minimum wage rose to $7.25 (as of August 2015). The core CPI for urban workers was 53.50 in May of 1975 and 242.65 in August of 2015. Use the information from above to answer the following questions.. a) Convert the May 1975 minimum wage and August 2015 minimum wage into base year dollars. b) Would you rather be a minimum wage worker in 1975 or 2015? Explain using the idea of purchasing power. c) Using 2015 dollars, calculate the wage differential between 1975 and 2015 minimum wage workers. Interpret the number. d) Convert the August 2015 minimum wage into May 1975 dollars. 4) Suppose that the CPI is 100 in 1992. In 1993 and 1994 the CPI rose to 112 and 120, respectively. During 1995 the economy experienced an inflation of 10 percent. a) If consumption in 1994 was 300 billion in 1994 dollars, what is this consumption expressed in 1992 dollars? b) What is the 1995 value of the CPI? 3) The federal minimum wage in May of 1975 was $2.10 per hour. Forty years later, the federal minimum wage rose to $7.25 (as of August 2015). The core CPI for urban workers was 53.50 in May of 1975 and 242.65 in August of 2015. Use the information from above to answer the following questions.. a) Convert the May 1975 minimum wage and August 2015 minimum wage into base year dollars. b) Would you rather be a minimum wage worker in 1975 or 2015? Explain using the idea of purchasing power. c) Using 2015 dollars, calculate the wage differential between 1975 and 2015 minimum wage workers. Interpret the number. d) Convert the August 2015 minimum wage into May 1975 dollars. 4) Suppose that the CPI is 100 in 1992. In 1993 and 1994 the CPI rose to 112 and 120, respectively. During 1995 the economy experienced an inflation of 10 percent. a) If consumption in 1994 was 300 billion in 1994 dollars, what is this consumption expressed in 1992 dollars? b) What is the 1995 value of the CPI?

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a To convert the May 1975 minimum wage of 210 per hour and the August 2015 minimum wage of 725 per h... View the full answer