Final Review Loan info No localized trendline Suppose your boss gives you a 1% raise while inflation goes up 3%. What would your nonconstant dollar graph look like? How ‘bout constant dollar graph? In 1950 the median family income was $3,319, while the average Major League baseball player salary was $13,228. In 1998 the median household income was $38,885, while the average Major League baseball player income was $1.4 million. Using the CPI.xls, convert each of the 1950 incomes to constant 1998 dollars and compare the salaries of baseball players and the average household to each other and to their actual 1998 values. Put the constant dollar values in your word document. Using the CPI.xls, convert each of the 1950 incomes to constant 1998 dollars 1950 Baseball 1950 Household in 1998 in 1998 dollars dollars 89,467.39 22,448.01 …and compare the salaries of baseball players and the average household to each other 1950 baseball 1950 Household in 1950 in 1950 dollars dollars 13,228.00 3,319.00 1950 Baseball 1950 Household in 1998 in 1998 dollars dollars 89,467.39 22,448.01 and to their actual 1998 values. 1998 Actual baseball salary 1998 actual household salary 1,400,000.00 38,885.00 1950 Baseball 1950 Household in 1998 dollars in 1998 dollars 89,467.39 22,448.01 Have baseball player salaries risen faster than the salaries of the average worker? By what percent are the actual incomes in 1998 larger than the constant dollar values of the 1950 incomes? Show your work for both the median household and the baseball player. 1,400,000 89,467.39 14.67 1467% 89,437.39 38,885.00 22,448.01 .73 73% 22,448.01 If we play basketball and I score 100 points and you score 80. By what percent is my score larger than yours? By what percent is your score smaller than mine? If the price of an item increases at the same rate as inflation, what would the constant dollar graph for that item look like? What does the graph of DePaul tuition in constant 2008 dollars tell you about tuition increases over the years? Is DePaul tuition growing faster, slower, or at the same rate as inflation? DePaul Tuition in constant 2008 dollars $30,000.00 $25,000.00 $20,000.00 $15,000.00 $10,000.00 $5,000.00 $1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 The annual inflation rate is defined as the percentage change in the annual CPI from the previous year to the current year. For example, the CPI in 1998 was 163.0 while the CPI in 1999 was 166.6. The inflation rate for 1999 was therefore (166.6-163.0)/163.0 or 2.2%. a. Open the file CPI.xls, which contains the annual CPI from 1912 to 2008. Add a new column to the table that contains the inflation rate for each year. Paste the resulting table for the years 1970-2008 into your Word document. Please do not paste the entire table from 1912-2008 into the document; we want to focus on the years 1970-2008.