Assume the CPI (Consumer Price Index) basket of goods and services was 104.7 in 2004, and 125.2 in 2014.

a)By what percentage did prices rise over the period from 2004 to 2014?

Answer (to one decimal place) (125.2/ 104.7)x100 = 119.6% (2 marks)

b)Jan's wage at ABC Innovation was $60,000 in 2004 and had increased to $70,00 by 2014. What was Jan's "real" wage in 2014 relative to what she was earning in 2004 after adjusting for inflation? (2 marks)