Question 1

Table 24-7. The table below applies to an economy with only two goods - hamburgers and hot dogs. The fixed basket consists of 4 hamburgers and 8 hot dogs.
 
-Refer to Table 24-7. If the base year is 2010, then the economy's inflation rate in 2010 is

Accepted Answer

A)   8 percent.
B)   10 percent.
C)   10.91 percent.
D)   11.11 percent.E) A) and B)
F) None of the above

Question 2

Table 24-5
The table below pertains to Wrexington, an economy in which the typical consumer's basket consists of 20 pounds of meat and 10 toys.
 
-Refer to Table 24-5. The cost of the basket in 2006 was

Accepted Answer

A)   $9.
B)   $130.
C)   $140.
D)   $270.E) A) and D)
F) C) and D)

Question 3

The real interest rate tells you how fast the purchasing power of your bank account rises over time.

Accepted Answer

A) True 
 B)False

Question 4

In an imaginary economy, consumers buy only razors and cologne. The fixed basket consists of 6 razors and 4 bottles of cologne. A razor cost $20 in 2009 and $25 in 2010. A bottle of cologne cost $30 in 2009 and $40 in 2010. Using 2009 as the base year, which of the following statements is correct?

Accepted Answer

A)   For the typical consumer, the number of dollars spent on razors is equal to the number of dollars spent on cologne in each of the two years.
B)   The consumer price index is 310 in 2010.
C)   The rate of inflation is 29.17% in 2010.
D)   None of the above is correct.E) All of the above
F) B) and C)

Question 5

Table 24-11. Megan's salary for three consecutive years, along with other values, are presented in the table below.
 
-Refer to Table 24-11. The nominal interest rate for 2012 is

Accepted Answer

A)   0.93 percent.
B)   6.70 percent.
C)   4.44 percent.
D)   4.47 percent.E) A) and D)
F) All of the above

Question 6

Most, but not all, athletic apparel sold in the United States is imported from other nations. If the price of athletic apparel increases, the GDP deflator will

Accepted Answer

A)   increase less than will the consumer price index.
B)   increase more than will the consumer price index.
C)   not increase, but the consumer price index will increase.
D)   increase, but the consumer price index will not increase.E) B) and D)
F) C) and D)

Question 7

Scenario 24-4
Quinn has job offers in Wrexington and across the country in Charlieville. The Wrexington job would pay a salary of $50,000 per year, and the Charlieville job would pay a salary of $40,000 per year. The CPI in Wrexington is 150, and the CPI in Charlieville is 90.
-Refer to Scenario 24-4. The Wrexington salary in Charlieville dollars is

Accepted Answer

A)   $30,000.00.
B)   $33,333.33.
C)   $45,000.00
D)   $83,333.33.E) C) and D)
F) All of the above

Question 8

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. How much was the cost of the basket in 2008?

Accepted Answer

A)   $78.25
B)   $84.75
C)   $169.50
D)   $456.50E) A) and C)
F) B) and C)

Question 9

David earned a salary of $43,500 in 1994 and $89,000 in 2010. The consumer price index was 148.2 in 1994 and 215.3 in 2010. David's 1994 salary in 2010 dollars is

Accepted Answer

A)   $43,849.05
B)   $61,263.43
C)   $63,195.34
D)   $93,655.50E) B) and D)
F) A) and D)

Question 10

Table 24-4
The table below pertains to Studious, an economy in which the typical consumer's basket consists of 5 books and 10 calculators.
 
-Refer to Table 24-4. The cost of the basket

Accepted Answer

A)   increased from 2012 to 2013 and increased from 2013 to 2014.
B)   increased from 2012 to 2013 and decreased from 2013 to 2014.
C)   decreased from 2012 to 2013 and increased from 2013 to 2014.
D)   decreased from 2012 to 2013 and decreased from 2013 to 2014.E) All of the above
F) C) and D)

Question 11

In comparison to the situation in the late 1970s, the United States experienced lower nominal interest rates and higher real interest rates in the late 1990s.

Accepted Answer

A) True 
 B)False

Question 12

One problem with the consumer price index stems from the fact that, over time, consumers tend to buy larger quantities of goods that have become relatively less expensive and smaller quantities of goods that have become relatively more expensive. This problem is called

Accepted Answer

A)   price-change neglect.
B)   unmeasured quality change.
C)   substitution bias.
D)   relative bias.E) B) and D)
F) None of the above

Question 13

Table 24-2
The table below pertains to Pieway, an economy in which the typical consumer's basket consists of 15 bushels of peaches and 10 bushels of pecans.
 
-Refer to Table 24-2. If 2013 is the base year, then the inflation rate in 2013 was

Accepted Answer

A)   22.5 percent.
B)   2.35 percent.
C)   10 percent.
D)   4.4 percent.E) A) and C)
F) A) and D)

Question 14

The consumer price index is used to

Accepted Answer

A)   monitor changes in the level of wholesale prices in the economy.
B)   monitor changes in the cost of living over time.
C)   monitor changes in the level of real GDP over time.
D)   monitor changes in the stock market.E) All of the above
F) A) and D)

Question 15

The producer price index measures the cost of a basket of goods and services

Accepted Answer

A)   typically produced in the economy.
B)   produced for a typical consumer.
C)   sold by producers.
D)   bought by firms.E) B) and C)
F) A) and D)

Question 16

Suppose Stan Musial earned $115,000 in 1947. If the CPI was 82 in 1947, and was 246 in 1990, what is Stan Musial's 1947 salary in 1990 dollars?

Accepted Answer

Stan Musial's 1947 s...

Question 17

Table 24-3
The table below pertains to Iowan, an economy in which the typical consumer's basket consists of 4 pounds of pork and 3 bushels of corn.
 
-Refer to Table 24-3. If 2013 is the base year, then the CPI for 2012 was

Accepted Answer

A)   75.3.
B)   100.0.
C)   116.0.
D)   132.8.E) None of the above
F) A) and B)

Question 18

Suppose that U.S. mining companies purchase German-made ore trucks at a reduced price. By itself, what effect will this purchase have on the GDP deflator and on the consumer price index?

Accepted Answer

A)   The consumer price index and the GDP deflator will both fall.
B)   The consumer price index and the GDP deflator will both be unaffected.
C)   The consumer price index will fall, and the GDP deflator will be unaffected.
D)   The consumer price index will be unaffected, and the GDP deflator will fall.E) None of the above
F) All of the above

Question 19

The largest sector in the consumer price index market basket is food and beverage purchases.

Accepted Answer

A) True 
 B)False

Question 20

When the price of Italian wine rises, this change is reflected in the U.S. CPI but not in the U.S. GDP deflator.

Accepted Answer

A) True 
 B)False

Exam 6: Measuring the Cost of Living

The real interest rate tells you how fast the purchasing power of your bank account rises over time.

Correct Answer
verified

The largest sector in the consumer price index market basket is food and beverage purchases.

Correct Answer
verified

Suppose Stan Musial earned $115,000 in 1947. If the CPI was 82 in 1947, and was 246 in 1990, what is Stan Musial's 1947 salary in 1990 dollars?

Correct Answer
verified
Stan Musial's 1947 s...
View Answer

Suppose that U.S. mining companies purchase German-made ore trucks at a reduced price. By itself, what effect will this purchase have on the GDP deflator and on the consumer price index?

Correct Answer
verified

In an imaginary economy, consumers buy only razors and cologne. The fixed basket consists of 6 razors and 4 bottles of cologne. A razor cost $20 in 2009 and $25 in 2010. A bottle of cologne cost $30 in 2009 and $40 in 2010. Using 2009 as the base year, which of the following statements is correct?

Correct Answer
verified

Table 24-7. The table below applies to an economy with only two goods - hamburgers and hot dogs. The fixed basket consists of 4 hamburgers and 8 hot dogs. -Refer to Table 24-7. If the base year is 2010, then the economy's inflation rate in 2010 is

Correct Answer
verified

One problem with the consumer price index stems from the fact that, over time, consumers tend to buy larger quantities of goods that have become relatively less expensive and smaller quantities of goods that have become relatively more expensive. This problem is called

Correct Answer
verified

Table 24-2 The table below pertains to Pieway, an economy in which the typical consumer's basket consists of 15 bushels of peaches and 10 bushels of pecans. -Refer to Table 24-2. If 2013 is the base year, then the inflation rate in 2013 was

Correct Answer
verified

The producer price index measures the cost of a basket of goods and services

Correct Answer
verified

David earned a salary of $43,500 in 1994 and $89,000 in 2010. The consumer price index was 148.2 in 1994 and 215.3 in 2010. David's 1994 salary in 2010 dollars is

Correct Answer
verified

When the price of Italian wine rises, this change is reflected in the U.S. CPI but not in the U.S. GDP deflator.

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. How much was the cost of the basket in 2008?

Correct Answer
verified

The consumer price index is used to

Correct Answer
verified

Most, but not all, athletic apparel sold in the United States is imported from other nations. If the price of athletic apparel increases, the GDP deflator will

Correct Answer
verified

Table 24-5 The table below pertains to Wrexington, an economy in which the typical consumer's basket consists of 20 pounds of meat and 10 toys. -Refer to Table 24-5. The cost of the basket in 2006 was

Correct Answer
verified

Correct Answer
verified

Table 24-11. Megan's salary for three consecutive years, along with other values, are presented in the table below. -Refer to Table 24-11. The nominal interest rate for 2012 is

Correct Answer
verified

In comparison to the situation in the late 1970s, the United States experienced lower nominal interest rates and higher real interest rates in the late 1990s.

Correct Answer
verified

Table 24-4 The table below pertains to Studious, an economy in which the typical consumer's basket consists of 5 books and 10 calculators. -Refer to Table 24-4. The cost of the basket

Correct Answer
verified

Table 24-3 The table below pertains to Iowan, an economy in which the typical consumer's basket consists of 4 pounds of pork and 3 bushels of corn. -Refer to Table 24-3. If 2013 is the base year, then the CPI for 2012 was

Correct Answer
verified

Exam 6: Measuring the Cost of Living

The real interest rate tells you how fast the purchasing power of your bank account rises over time.

Correct AnswerverifiedShow Answer

The largest sector in the consumer price index market basket is food and beverage purchases.

Correct AnswerverifiedShow Answer

Suppose Stan Musial earned $115,000 in 1947. If the CPI was 82 in 1947, and was 246 in 1990, what is Stan Musial's 1947 salary in 1990 dollars?

Correct AnswerverifiedStan Musial's 1947 s...View AnswerShow Answer

Suppose that U.S. mining companies purchase German-made ore trucks at a reduced price. By itself, what effect will this purchase have on the GDP deflator and on the consumer price index?

Correct AnswerverifiedShow Answer

In an imaginary economy, consumers buy only razors and cologne. The fixed basket consists of 6 razors and 4 bottles of cologne. A razor cost $20 in 2009 and $25 in 2010. A bottle of cologne cost $30 in 2009 and $40 in 2010. Using 2009 as the base year, which of the following statements is correct?

Correct AnswerverifiedShow Answer

Table 24-7. The table below applies to an economy with only two goods - hamburgers and hot dogs. The fixed basket consists of 4 hamburgers and 8 hot dogs. -Refer to Table 24-7. If the base year is 2010, then the economy's inflation rate in 2010 is

Correct AnswerverifiedShow Answer

One problem with the consumer price index stems from the fact that, over time, consumers tend to buy larger quantities of goods that have become relatively less expensive and smaller quantities of goods that have become relatively more expensive. This problem is called

Correct AnswerverifiedShow Answer

Table 24-2 The table below pertains to Pieway, an economy in which the typical consumer's basket consists of 15 bushels of peaches and 10 bushels of pecans. -Refer to Table 24-2. If 2013 is the base year, then the inflation rate in 2013 was

Correct AnswerverifiedShow Answer

The producer price index measures the cost of a basket of goods and services

Correct AnswerverifiedShow Answer

David earned a salary of $43,500 in 1994 and $89,000 in 2010. The consumer price index was 148.2 in 1994 and 215.3 in 2010. David's 1994 salary in 2010 dollars is

Correct AnswerverifiedShow Answer

When the price of Italian wine rises, this change is reflected in the U.S. CPI but not in the U.S. GDP deflator.

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. How much was the cost of the basket in 2008?

Correct AnswerverifiedShow Answer

The consumer price index is used to

Correct AnswerverifiedShow Answer

Most, but not all, athletic apparel sold in the United States is imported from other nations. If the price of athletic apparel increases, the GDP deflator will

Correct AnswerverifiedShow Answer

Table 24-5 The table below pertains to Wrexington, an economy in which the typical consumer's basket consists of 20 pounds of meat and 10 toys. -Refer to Table 24-5. The cost of the basket in 2006 was

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 24-11. Megan's salary for three consecutive years, along with other values, are presented in the table below. -Refer to Table 24-11. The nominal interest rate for 2012 is

Correct AnswerverifiedShow Answer

In comparison to the situation in the late 1970s, the United States experienced lower nominal interest rates and higher real interest rates in the late 1990s.

Correct AnswerverifiedShow Answer

Table 24-4 The table below pertains to Studious, an economy in which the typical consumer's basket consists of 5 books and 10 calculators. -Refer to Table 24-4. The cost of the basket

Correct AnswerverifiedShow Answer

Table 24-3 The table below pertains to Iowan, an economy in which the typical consumer's basket consists of 4 pounds of pork and 3 bushels of corn. -Refer to Table 24-3. If 2013 is the base year, then the CPI for 2012 was

Correct AnswerverifiedShow Answer

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Stan Musial's 1947 s...
View Answer

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