Question 1

Every unit of good x that is produced in the United States is exported to other countries. An increase in the price of good x shows up

Accepted Answer

A) in the consumer price index and in the GDP deflator. 
B) in the consumer price index, but not in the GDP deflator. 
C) in the GDP deflator, but not in the consumer price index. 
D) in neither the consumer price index nor in the GDP deflator. 
A) in the consumer price index and in the GDP deflator. 
B) in the consumer price index, but not in the GDP deflator. 
C) in the GDP deflator, but not in the consumer price index. 
D) in neither the consumer price index nor in the GDP deflator.

Question 2

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 2008 is the base year, then the consumer price index was

Accepted Answer

A) 100.00 in 2008, 110.03 in 2009, and 117.43 in 2010. 
B) 100.00 in 2008, 110.03 in 2009, and 129.20 in 2010. 
C) 100.00 in 2008, 117.00 in 2009, and 132.50 in 2010. 
D) 169.50 in 2008, 186.50 in 2009, and 219.00 in 2010. 
A) 100.00 in 2008, 110.03 in 2009, and 117.43 in 2010. 
B) 100.00 in 2008, 110.03 in 2009, and 129.20 in 2010. 
C) 100.00 in 2008, 117.00 in 2009, and 132.50 in 2010. 
D) 169.50 in 2008, 186.50 in 2009, and 219.00 in 2010.

Question 3

When computing the cost of the basket of goods and services purchased by a typical consumer, which of the following changes from year to year?

Accepted Answer

A) the quantities of the goods and services purchased 
B) the prices of the goods and services 
C) the goods and services making up the basket 
D) All of the above are correct. 
A) the quantities of the goods and services purchased 
B) the prices of the goods and services 
C) the goods and services making up the basket 
D) All of the above are correct.

Question 4

Harry spent $39,000 in 2009 and $42,000 in 2014 on goods and services. The consumer price index was 220 for 2009 and 231 for 2014. Harry's 2014 spending in 2009 dollars is about

Accepted Answer

A) $40,000. 
B) $44,100. 
C) $37,838. 
D) $40,091. 
A) $40,000. 
B) $44,100. 
C) $37,838. 
D) $40,091.

Question 5

Bob deposits $100 in a bank account that pays an annual interest rate of 5 percent. A year later, Bob withdraws his $105. If deflation was 7 percent during the year the money was deposited, then Bob's purchasing power has increased by 12 percent.

Accepted Answer

A) True 
 B)False

Question 6

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. 
A) $30,000.00. 
B) $33,333.33. 
C) $45,000.00 
D) $83,333.33.

Question 7

A worker received $5 for a daily wage in 1930. What is the value of that wage today if the CPI was 17 in 1930 and is 230 today?

Accepted Answer

A) 37 cents 
B) $4.63 
C) $67.65 
D) $37.86 
A) 37 cents 
B) $4.63 
C) $67.65 
D) $37.86

Question 8

During periods of deflation, the real interest rate will be lower than the nominal interest rate.​

Accepted Answer

A) True 
 B)False

Question 9

In 1983, one could buy a model radio-controlled airplane for $11.50 each. Those same planes are available today and the price increased at exactly the rate of inflation. If the CPI today is 220.5 and in 1983 was 105, what is the price of the airplane today?

Accepted Answer

A) $24.15 
B) $11.50 
C) $5.48 
D) $2.10 
A) $24.15 
B) $11.50 
C) $5.48 
D) $2.10

Question 10

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. If the base year is 2004, then the CPI in 2004 was

Accepted Answer

A) 0. 
B) 1. 
C) 80. 
D) 100. 
A) 0. 
B) 1. 
C) 80. 
D) 100.

Question 11

The producer price index measures the cost of a basket of goods and services bought by firms rather than consumers.

Accepted Answer

A) True 
 B)False

Question 12

Scenario 24-6
TOPICS:
Price levels
Inflation
KEYWORDS:
BLOOM'S: Application
CUSTOM ID:
016.24 - SAE - MANK08
Table 24-14
The table below lists the per pound prices of meat and potatoes for the months of January, February, and March. Assume that the typical consumer buys 25 pounds of meat and 15 pounds of potatoes each month, and that January is the base period.  
-Refer to Table 24-14. Calculate the inflation rate for February.

Accepted Answer

The answer of Scenario 24-6
TOPICS:
Price levels
Inflation
KEYWORDS:
BLOOM'S: Application
CUSTOM ID:
016.24 - SAE...

Question 13

A decrease in the price of large tractors imported into the United States from Russia

Accepted Answer

A) leaves the GDP deflator unchanged but decreases the consumer price index. 
B) decreases the GDP deflator but leaves the consumer price index unchanged. 
C) decreases both the GDP deflator and the consumer price index. 
D) leaves both the GDP deflator and the consumer price index unchanged. 
A) leaves the GDP deflator unchanged but decreases the consumer price index. 
B) decreases the GDP deflator but leaves the consumer price index unchanged. 
C) decreases both the GDP deflator and the consumer price index. 
D) leaves both the GDP deflator and the consumer price index unchanged.

Question 14

Write the formula for computing the cost of a basket of goods in a given period assuming you only have two goods, X and Y, which are bought in quantities Qx and Qy, and sold at prices of Px and Py.

Accepted Answer

The answer of Write the formula for computing the cost...

Question 15

Which of the following statements is true?

Accepted Answer

A) Even if we know the values of the consumer price index for the years 2009 and 2010, we cannot calculate the inflation rate for 2010 if we do not know which year is the base year. 
B) If we know the base year is 1990, and if we know the value of the consumer price index for the year 2010, then we have all the information we need to calculate the inflation rate for 2010. 
C) If we know the base year is 2000, and if we know the value of the consumer price index for the year 1995, then we have all the information we need to calculate the inflation rate for 1995. 
D) If we know the base year is 2000, and if we know the value of the consumer price index for the year 1995, then we have all the information we need to calculate the percentage change in the cost of living between 1995 and 2000. 
A) Even if we know the values of the consumer price index for the years 2009 and 2010, we cannot calculate the inflation rate for 2010 if we do not know which year is the base year. 
B) If we know the base year is 1990, and if we know the value of the consumer price index for the year 2010, then we have all the information we need to calculate the inflation rate for 2010. 
C) If we know the base year is 2000, and if we know the value of the consumer price index for the year 1995, then we have all the information we need to calculate the inflation rate for 1995. 
D) If we know the base year is 2000, and if we know the value of the consumer price index for the year 1995, then we have all the information we need to calculate the percentage change in the cost of living between 1995 and 2000.

Question 16

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. If the base year is 2006, then the inflation rate in 2005 was

Accepted Answer

A) -44.5%. 
B) -30.8%. 
C) 7.7%. 
D) 12.5%. 
A) -44.5%. 
B) -30.8%. 
C) 7.7%. 
D) 12.5%.

Question 17

Assume most athletic apparel bought by U.S. consumers is imported from other nations. If all else is constant, an increase in the price of foreign-made athletic apparel will cause the U.S.

Accepted Answer

A) consumer price index and GDP deflator to increase by exactly the same amount. 
B) GDP deflator to increase more than the consumer price index. 
C) consumer price index to increase more than the GDP deflator. 
D) GDP deflator to decrease less than the consumer price index. 
A) consumer price index and GDP deflator to increase by exactly the same amount. 
B) GDP deflator to increase more than the consumer price index. 
C) consumer price index to increase more than the GDP deflator. 
D) GDP deflator to decrease less than the consumer price index.

Question 18

When the overall level of prices in the economy is increasing, economists say that the economy is experiencing

Accepted Answer

A) economic growth. 
B) stagflation. 
C) inflation. 
D) deflation. 
A) economic growth. 
B) stagflation. 
C) inflation. 
D) deflation.

Question 19

Scenario 24-3
Sue Holloway was an accountant in 1944 and earned $12,000 that year. Her son, Josh Holloway, is an accountant today and he earned $210,000 in 2013. The price index was 17.6 in 1944 and 218.4 in 2013.
-Refer to Scenario 24-3. In real terms, Sue Holloway's income amounts to about what percentage of Josh Holloway's income?

Accepted Answer

A) 11.0 percent 
B) 65.2 percent 
C) 70.9 percent 
D) 114.7 percent 
A) 11.0 percent 
B) 65.2 percent 
C) 70.9 percent 
D) 114.7 percent

Question 20

If the consumer price index changes from 125 in September to 150 in October, what is the rate of inflation?

Accepted Answer

A) 45.5% 
B) 20.0% 
C) 16.7% 
D) 9.1% 
A) 45.5% 
B) 20.0% 
C) 16.7% 
D) 9.1%

Exam 24: Measuring the Cost of Living

Every unit of good x that is produced in the United States is exported to other countries. An increase in the price of good x shows up

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 2008 is the base year, then the consumer price index was

When computing the cost of the basket of goods and services purchased by a typical consumer, which of the following changes from year to year?

Harry spent $39,000 in 2009 and $42,000 in 2014 on goods and services. The consumer price index was 220 for 2009 and 231 for 2014. Harry's 2014 spending in 2009 dollars is about

Bob deposits $100 in a bank account that pays an annual interest rate of 5 percent. A year later, Bob withdraws his $105. If deflation was 7 percent during the year the money was deposited, then Bob's purchasing power has increased by 12 percent.

A worker received $5 for a daily wage in 1930. What is the value of that wage today if the CPI was 17 in 1930 and is 230 today?

During periods of deflation, the real interest rate will be lower than the nominal interest rate.​

In 1983, one could buy a model radio-controlled airplane for $11.50 each. Those same planes are available today and the price increased at exactly the rate of inflation. If the CPI today is 220.5 and in 1983 was 105, what is the price of the airplane today?

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. If the base year is 2004, then the CPI in 2004 was

The producer price index measures the cost of a basket of goods and services bought by firms rather than consumers.

A decrease in the price of large tractors imported into the United States from Russia

Write the formula for computing the cost of a basket of goods in a given period assuming you only have two goods, X and Y, which are bought in quantities Qx and Qy, and sold at prices of Px and Py.

Which of the following statements is true?

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. If the base year is 2006, then the inflation rate in 2005 was

Assume most athletic apparel bought by U.S. consumers is imported from other nations. If all else is constant, an increase in the price of foreign-made athletic apparel will cause the U.S.

When the overall level of prices in the economy is increasing, economists say that the economy is experiencing

If the consumer price index changes from 125 in September to 150 in October, what is the rate of inflation?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Applications: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring a Nation S Income

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

During periods of deflation, the real interest rate will be lower than the nominal interest rate.