It can be an interesting exercise to compare the purchasing power of the dollar over different periods in history. Go to www.bls.gov/cpi/ and scroll down to the link to the inflation calculator. Use this calculator to compute the following:

a. If a new home cost $125,000 in 2011, what would it have cost in 1950?

b. The average household income in 2011 was about

$40,000. How much would this have been in 1945?

c. An average new car cost about $20,000 in 2011.

What would this have cost in 1945?

d. Using the results you found in Exercises b and c, does a car consume more or less of average household income in 2011 than in 1945?