According to the u. s. census bureau (), the median household income in the united states was $23,618 in 1985, $34,076 in 1995, $46,326 in 2005, and $57,230 in 2015. in purchasing power terms, how did family income compare in each of those four years? you will need to know that the cpi (multiplied by 100, 1982–1984 = 100) was 107.6 in 1985, 152.4 in 1995, 195.3 in 2005, and 237.0 in 2015

The highest median income in purchasing power terms was in 1995, then 2005, 2015, and last 1985

Explanation:

To solve this question we must transform the median household income into comparable units. To do so we use the CPI data given in the problem.

We can arrange everything in a spreadsheet like the attached figure. In  column A we have the years, in B the nominal median household income, in the third the CPI divided by 100, this will allow us to deflate and calculate the median income in constant 1982-1984 us dollars (since 1982-1984 will be the numeraire at 1). We do that by dividing column B by C, which is shown in column D.

With these values then we have all the median incomes in comparable units. We now can order and compare them

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