Answer to Question 3:

In 1990, a city bus driver in a small western Canadian city earned the hourly wage rate of $12.50. In 1961 a person doing the same job earned $1.92 per hour. In 1961, the consumer price index, taken on a 1948 base was 129.9. In 1990 it was 646.1. Since 1961, real wages of city bus drivers in that city have increased by

1. about 30 percent.

2. about 0.58 1961 dollars.

3. about 2.90 1990 dollars.

4. All of the above.

Choose the correct answer.