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In: Economics

If a home costs $44,000 in 1962 and the CPI in 1962 = 30 and the...

If a home costs $44,000 in 1962 and the CPI in 1962 = 30 and the CPI in 2019 = 260. Then the cost of the home in 2019 dollars, adjusted for inflation is above $395,000.

T/F

Solutions

Expert Solution

False.

Adjusted inflation is calculated as-

CPI of 2019 / CPI of 1962 × Actual price

Then, 260 / 30 × $44000 = $381333.33

Hence, adjustable value is not above $395000.

Rahul Sunny answered 2 years ago
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