You can find data on the consumer price index (CPI) on the Bureau of Labor Statistics website, www.bls.gov/cpi/home.htm. Tables of historical data can be formatted to provide either level of the index or changes in the index (i.e., the rate of inflation). Construct a table of annual inflation rates since 1913. When did the USA last experience a year of deflation (i.e., falling prices)? Find the inflation rate in the latest year. Now log on to www.bloomberg.com, and on the first page find a measure of the short-term interest rate (e.g., the 2-year rate). Use the recent level of inflation to calculate the real interest rate. Consider the case of Herbert Pro the roe, who in 1920 was an eligible bachelor with an income of $2,000 a year. What is that equivalent to today?

Answer rating: 100% (QA)

100 in 1913 is equivalent in purchasing power to about 283988 today an increase of 273988 over 109 years The dollar had an average inflation rate of 312 per year between 1913 and today producing a cum... View the full answer