Tom Denio has been a project manager in a small construction firm in Atlanta since 2000. He started with a salary of $52,000, which grew to $84,000 in 2008. The revenue of the construction firm also grew over the years, increasing from $13 million in 2000 to $18 million in 2008. According to the Bureau of Labor Statistics, the values of the consumer price index with a base of 1982– 1984 for 2000 and 2008 are 172.20 and 215.30, respectively. The corresponding values of the producer price index are 132.70 and 189.60, respectively.

a. Compute and analyze the nominal and real increase in Tom’s salary.

b. Compute and analyze the nominal and real revenue growth of the construction firm.