How many items can you buy

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Question - Assume that your salary is $100 a year and that you spend it all on a total of 10 items with the price of each item being the same. How many items can you buy and what happens to your purchasing power if (a) your salary increases by 10% and so does the average price level (b) your salary increases by 10% and the average price level increases by 20% (c) your salary increases by 10% and the average price level increases by 5%?

Reference no: EM133178724

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