2. In year 1 the CPI is 130.2, and in year 2 the CPI is 151.6. From year 1 to year 2, Martha's salary rises from $31,000 to $36,000, and Chiang's salary rises from $42,000 to $50,000. Whose salary is "more than keeping up with inflation" and why?

For Martha and Chiang, please calculate:

1. Real Income for Year 1.
2. Real Income for Year 2.
3. Percent change in price-the inflation rate.
4. Percent change in nominal income.

Decide who has more than kept up with inflation and then explain why Martha or Chiang's salary has more than kept up with inflation from steps 1 through 4 above.