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In 1913, Andrew Carnegie's net worth was approximately $475 million. In 2018, Mark Zuckerberg’s net worth...

In 1913, Andrew Carnegie's net worth was approximately $475 million. In 2018, Mark Zuckerberg’s net worth was $58 billion. One dollar ($1) in January of 1913 has the same buying power as $25.76 in September of 2018.

What is the real wealth for Andrew Carnegie in 1913?

a. 2.5b units of goods and services

b. 1.5b units of goods and services

c. 768m units of goods and services

d. 475m units of goods and services

e. 2.25b units of goods and services

What is the real wealth for Mark Zuckerberg in 2018?

a. 2.25b units of goods and services

b. 1.5b units of goods and services

c. 768m units of goods and services

d. 475m units of goods and services

e. 4.25b units of goods and services

Who is the wealthier of the two?

A. Andrew Carnegie

B. Mark Zuckerberg

Solutions

Expert Solution

Assume that 1913 is base year when Andrew Carnegie's net worth was approximately $475 million and One dollar ($1) in January of 1913 has the same buying power as $25.76 in September of 2018.

As the Mark Zuckerberg’s net worth was $58 billion in 2018 therefore his equivalent in 1913

= His worth in 2018 /Equivalent purchasing power in 2018 = $58 billion / $25.76 = $2.25 billion

Therefore Mark Zuckerberg’s net worth was equivalent to $2.25 billion in 1913

Now answer of following questions -

What is the real wealth for Andrew Carnegie in 1913?

1913 was base year therefore assume $1 equal to 1 unit of goods and services; Therefore $475 million is equal to 475 million units of goods and services

Therefore correct answer is option d. 475m units of goods and services

What is the real wealth for Mark Zuckerberg in 2018?

If 1913 $1 was equal to 1 unit of goods and services; Then in 2018; $25.76 was equal to 1 unit of goods and services. Therefore $58 billion is equal to 2.25 billion units of goods and services

Therefore correct answer is option a. 2.25b units of goods and services

Who is the wealthier of the two?

Mark Zuckerberg was wealthier of two as his net worth in real term was equal to 2.25b units of goods and services in comparison of Andrew Carnegie’s 475m units of goods and services

Therefore correct answer is option B. Mark Zuckerberg

jeff jeffy answered 1 year ago
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