Question 1

Table 24-13. Olivia's expenditures on clothing for three consecutive years, along with some values for the CPI, are presented in the table below. 
-Refer to Table 24-13. Suppose Olivia's 2009 clothing expenditure in 2010 dollars amounts to $1,440. Then X, the consumer price index for 2009, has a value of

Accepted Answer

A)  120.
B)  130.
C)  140.
D)  150.E) B) and C)
F) A) and D)

Question 2

Table 24-11. Megan's salary for three consecutive years, along with other values, is presented in the table below. 
-Refer to Table 24-11. Megan's 2011 salary in 2013 dollars is

Accepted Answer

A)  $67,600.
B)  $67,489.
C)  $67,588.
D)  $70,850.E) A) and C)
F) B) and C)

Question 3

If the nominal interest rate is 5 percent, and the rate of inflation is 3 percent, then the real interest rate is equal to

Accepted Answer

A)  2 percent.
B)  0.6 percent.
C)  1.7 percent.
D)  15 percent.E) A) and B)
F) A) and C)

Question 4

If the price of Italian shoes imported into the United States increases, then

Accepted Answer

A)  both the GDP deflator and the consumer price index will increase.
B)  neither the GDP deflator nor the consumer price index will increase.
C)  the GDP deflator will increase, but the consumer price index will not increase.
D)  the consumer price index will increase, but the GDP deflator will not increase.E) C) and D)
F) All of the above

Question 5

If the real interest rate is 5 percent and the inflation rate is 2 percent, then the nominal interest rate is 7 percent.

Accepted Answer

A) True 
 B)False

Question 6

Consumer price index =  
 × 100.

Accepted Answer

A) True 
 B)False

Question 7

Henri earned a salary of $50,000 in 2001 and $60,000 in 2012. The consumer price index was 177 in 2001 and 225 in 2012. Henri's 2001 salary in 2012 dollars is

Accepted Answer

A)  $39,333.33.
B)  $74,000.00.
C)  $89,333.33.
D)  $63,559.32.E) B) and C)
F) None of the above

Question 8

The CPI is a measure of the overall cost of the goods and services bought by a typical consumer.

Accepted Answer

A) True 
 B)False

Question 9

The Bureau of Labor Statistics is part of the U.S. Department of Labor.

Accepted Answer

A) True 
 B)False

Question 10

Table 24-6
The table below pertains to Napandsnack, an economy in which the typical consumer's basket consists of 2 pillows and 15 hotdogs. 
-Refer to Table 24-6. The cost of the basket

Accepted Answer

A)  increased from 2009 to 2010 and increased from 2010 to 2011.
B)  increased from 2009 to 2010 and decreased from 2010 to 2011.
C)  decreased from 2009 to 2010 and increased from 2010 to 2011.
D)  decreased from 2009 to 2010 and decreased from 2010 to 2011.E) None of the above
F) A) and B)

Question 11

What is the difference between the Consumer Price Index and the Producer Price Index?

Accepted Answer

The CPI measures the cost of a...

Question 12

Suppose in the year 2000 Ken earned $60,000 per year. If the CPI in the year 2000 was 172.2 and in 2015 was 236.7, what is the minimum level of income Ken would have needed to earn in 2015 to have maintained the same standard of living he had in 2000?

Accepted Answer

A)  ​$80,479
B)  $81,237
C)  $82,474
D)  $83,623E) A) and B)
F) A) and C)

Question 13

The introduction of a new good

Accepted Answer

A)  increases the cost of maintaining the same level of economic well-being.
B)  decreases the cost of maintaining the same level of economic well-being.
C)  has no impact on the cost of maintaining the same level of economic well-being.
D)  may increase or decrease the cost of maintaining the same level of economic well-being, depending on how expensive the new good is.E) B) and C)
F) A) and B)

Question 14

If the nominal interest rate is 5 percent and the rate of inflation is 9 percent, then the real interest rate is

Accepted Answer

A)  -4 percent.
B)  -0.44 percent.
C)  4 percent.
D)  14 percent.E) None of the above
F) A) and C)

Question 15

In a simple economy, people consume only 2 goods, food and clothing. The market basket of goods used to compute the CPI consists of 50 units of food and 10 units of clothing.  
a.What are the percentage increases in the price of food and in the price of clothing?
b.What is the percentage increase in the CPI?
c.Do these price changes affect all consumers to the same extent? Explain.

Accepted Answer

a.The price of food increased by 50 perc...

Question 16

Scenario 24-5
TOPICS:
Price levels
Inflation
KEYWORDS:
BLOOM'S: Application
CUSTOM ID:
012.24 - SAE - MANK08
Scenario 24-6
A small economy produced and consumed goods X and Y in 2010 and 2011 in the amounts shown in the table below. Assume that the market basket for the CPI is defined in the base year. 
-Refer to Scenario 24-6. Using 2011 as the base year, what is the CPI in each year?

Accepted Answer

The CPI is...

Question 17

Table 24-10
The table below shows the prices of baseballs and baseball bats for three years. Assume the typical consumer's basket consists of 6 baseballs and 2 baseball bats. 
-Refer to Table 24-10. If 2010 is the base year, then the consumer price index was

Accepted Answer

A)  77.40 in 2008, 85.16 in 2009, and 100.00 in 2010.
B)  50.50 in 2008, 67.50 in 2009, and 100.00 in 2010.
C)  90.88 in 2008, 85.16 in 2009, and 100.00 in 2010.
D)  169.50 in 2008, 186.50 in 2009, and 219.00 in 2010.E) All of the above
F) A) and C)

Question 18

Which of the following statements is correct?

Accepted Answer

A)  The CPI can be used to compare dollar figures from different points in time.
B)  The percentage change in the CPI is a measure of the inflation rate, but the percentage change in the GDP deflator is not a measure of the inflation rate.
C)  Compared to the consumer price index (CPI) , the GDP deflator is the more common gauge of inflation.
D)  The GDP deflator better reflects the goods and services bought by consumers than does the CPI.E) B) and C)
F) A) and D)

Question 19

If the CPI was 170 in 1998 and was 187 in 1999, what was the inflation rate in 1999?

Accepted Answer

The inflat...

Question 20

If the CPI was 125 this year and 120 last year, then

Accepted Answer

A)  the cost of the CPI basket of goods and services increased by 4.2 percent this year.
B)  the price level increased by 4.2 percent this year.
C)  the inflation rate for this year was 4.2 percent.
D)  All of the above are correct.E) All of the above
F) None of the above

Exam 24: Measuring the Cost of Living

Correct Answer
verified
a.The price of food increased by 50 perc...
View Answer

The Bureau of Labor Statistics is part of the U.S. Department of Labor.

Correct Answer
verified

If the nominal interest rate is 5 percent and the rate of inflation is 9 percent, then the real interest rate is

Correct Answer
verified

Suppose in the year 2000 Ken earned $60,000 per year. If the CPI in the year 2000 was 172.2 and in 2015 was 236.7, what is the minimum level of income Ken would have needed to earn in 2015 to have maintained the same standard of living he had in 2000?

Correct Answer
verified

The introduction of a new good

Correct Answer
verified

The CPI is a measure of the overall cost of the goods and services bought by a typical consumer.

Correct Answer
verified

What is the difference between the Consumer Price Index and the Producer Price Index?

Correct Answer
verified
The CPI measures the cost of a...
View Answer

If the price of Italian shoes imported into the United States increases, then

Correct Answer
verified

Correct Answer
verified
The CPI is...
View Answer

Table 24-6 The table below pertains to Napandsnack, an economy in which the typical consumer's basket consists of 2 pillows and 15 hotdogs. -Refer to Table 24-6. The cost of the basket

Correct Answer
verified

Correct Answer
verified

Table 24-11. Megan's salary for three consecutive years, along with other values, is presented in the table below. -Refer to Table 24-11. Megan's 2011 salary in 2013 dollars is

Correct Answer
verified

Henri earned a salary of $50,000 in 2001 and $60,000 in 2012. The consumer price index was 177 in 2001 and 225 in 2012. Henri's 2001 salary in 2012 dollars is

Correct Answer
verified

If the CPI was 125 this year and 120 last year, then

Correct Answer
verified

If the real interest rate is 5 percent and the inflation rate is 2 percent, then the nominal interest rate is 7 percent.

Correct Answer
verified

Table 24-10 The table below shows the prices of baseballs and baseball bats for three years. Assume the typical consumer's basket consists of 6 baseballs and 2 baseball bats. -Refer to Table 24-10. If 2010 is the base year, then the consumer price index was

Correct Answer
verified

Consumer price index = × 100.

Correct Answer
verified

If the nominal interest rate is 5 percent, and the rate of inflation is 3 percent, then the real interest rate is equal to

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

If the CPI was 170 in 1998 and was 187 in 1999, what was the inflation rate in 1999?

Correct Answer
verified
The inflat...
View Answer

Exam 24: Measuring the Cost of Living

Correct Answerverifieda.The price of food increased by 50 perc...View AnswerShow Answer

The Bureau of Labor Statistics is part of the U.S. Department of Labor.

Correct AnswerverifiedShow Answer

If the nominal interest rate is 5 percent and the rate of inflation is 9 percent, then the real interest rate is

Correct AnswerverifiedShow Answer

Suppose in the year 2000 Ken earned $60,000 per year. If the CPI in the year 2000 was 172.2 and in 2015 was 236.7, what is the minimum level of income Ken would have needed to earn in 2015 to have maintained the same standard of living he had in 2000?

Correct AnswerverifiedShow Answer

The introduction of a new good

Correct AnswerverifiedShow Answer

The CPI is a measure of the overall cost of the goods and services bought by a typical consumer.

Correct AnswerverifiedShow Answer

What is the difference between the Consumer Price Index and the Producer Price Index?

Correct AnswerverifiedThe CPI measures the cost of a...View AnswerShow Answer

If the price of Italian shoes imported into the United States increases, then

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe CPI is...View AnswerShow Answer

Table 24-6 The table below pertains to Napandsnack, an economy in which the typical consumer's basket consists of 2 pillows and 15 hotdogs. -Refer to Table 24-6. The cost of the basket

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 24-11. Megan's salary for three consecutive years, along with other values, is presented in the table below. -Refer to Table 24-11. Megan's 2011 salary in 2013 dollars is

Correct AnswerverifiedShow Answer

Henri earned a salary of $50,000 in 2001 and $60,000 in 2012. The consumer price index was 177 in 2001 and 225 in 2012. Henri's 2001 salary in 2012 dollars is

Correct AnswerverifiedShow Answer

If the CPI was 125 this year and 120 last year, then

Correct AnswerverifiedShow Answer

If the real interest rate is 5 percent and the inflation rate is 2 percent, then the nominal interest rate is 7 percent.

Correct AnswerverifiedShow Answer

Table 24-10 The table below shows the prices of baseballs and baseball bats for three years. Assume the typical consumer's basket consists of 6 baseballs and 2 baseball bats. -Refer to Table 24-10. If 2010 is the base year, then the consumer price index was

Correct AnswerverifiedShow Answer

Consumer price index = × 100.

Correct AnswerverifiedShow Answer

If the nominal interest rate is 5 percent, and the rate of inflation is 3 percent, then the real interest rate is equal to

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

If the CPI was 170 in 1998 and was 187 in 1999, what was the inflation rate in 1999?

Correct AnswerverifiedThe inflat...View AnswerShow Answer

Correct Answer
verified
a.The price of food increased by 50 perc...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
The CPI measures the cost of a...
View Answer

Correct Answer
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Correct Answer
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The CPI is...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The inflat...
View Answer