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3. Consider the following information about Nicaragua Year | CPI inflation | Wage | % Real Real change wage wage in wage base 2014 change adjusted real wage ear cordobas wage 2.50 n/a $737.5 | 766.35 199943.98 n/a 2004 | 59.32 | 34.88% | 3.50 | 4090 200995.48 2014135.07 5.687.67 5.907.97 n/a 3.9% 5.50 8.00 The wage is measured as thousands of Nicaraguan Cordobas per month.

a. b. c. d. e. f. Find the inflation rates from 1999-2004, 2004-2009, 2009-2014. Find the percentage change in the wage across the same time periods. Calculate the real wage in each year in base year cordobas. Calculate the real wage in each year in 2014 cordobas. Find the percentage change in the real wage for each time period. Using the real wage values from part d, convert to dollars if the exchange rate is 26 Nicaraguan cordobas per dollar. If goods/services are 60% cheaper in Nicaragua, calculate the purchasing power parity adjusted monthly real wage in each year, using your answers from part f. g.

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