Answer to Question #108222 in Macroeconomics for Jacqueline Cobos

Question

Suppose you currently live and work in​ Cleveland, earning a salary of ​$70 comma 000 per year and spending ​$20 comma 000 for housing. You just heard that you will be transferred to a city in California where housing is 50 percent more expensive. In negotiating a new​ salary, your objective is to keep your real income constant.  
Your new target salary is ​$
nothing. ​(Enter your response rounded to the nearest dollar.​)

Answer 1

New housing cost$=20000×1.5=$ $$30000;$

permanent income $=70000-20000=$ $$50000;$

New salary$=50000+30000=$$ $80000;$