Table 24-3 The following table lists the per gallon prices of gas and milk for the months of September, October, and November. Assume that the typical consumer buys 30 gallons of gas and 15 gallons of milk each month, and that September is the base period. \[\begin{array} { | c | c | c | } \hline \text { Month } & \begin{array} { c } \text { Price of Gas } \\ \text { (Dollars per gallon) } \end{array} & \begin{array} { c } \text { Price of Milk } \\ \text { (Dollars per gallon) } \end{array} \\ \hline \text { September } & 3.50 & 3.50 \\ \hline \text { October } & 3.85 & 3.52 \\ \hline \text { November } & 4.25 & 3.58 \\ \hline \end{array}\] -Refer to Table 24-3. What is the consumer price index for October?

A) 93.58 B) 86.92 C) 106.86 D) 92.88 A) 93.58 B) 86.92 C) 106.86 D) 92.88

Table 24-2 The following table pertains to Wiskancia, an economy in which the typical consumer's basket consists of 15 pounds of apples and 7 teddy bears. \[\begin{array} { | c | c | c | } \hline \text { Year } & \begin{array} { c } \text { Price of Apples } \\ \text { (Dollars per pound) } \end{array} & \begin{array} { c } \text { Price of Teddy bears } \\ \text { (Dollars per toy) } \end{array} \\ \hline 1 & 14 & 7 \\ \hline 2 & 12 & 5 \\ \hline 3 & 15 & 9 \\ \hline \end{array}\] -Refer to Table 24-2. The inflation rate was

A) positive in Year 2 and positive in Year 3. B) negative in Year 2 and negative in Year 3. C) positive in Year 2 and negative in Year 3. D) negative in Year 2 and positive in Year 3. A) positive in Year 2 and positive in Year 3. B) negative in Year 2 and negative in Year 3. C) positive in Year 2 and negative in Year 3. D) negative in Year 2 and positive in Year 3.

Exam 24: Measuring the Cost of Living

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Social Security payments are indexed for inflation using the CPI. A recent newspaper editorial claimed that Social Security recipients are harmed by years of low inflation because they do not receive as large an increase in their payments as they do in years of high inflation. Which of the following statements is correct?

(Multiple Choice)

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Question 41

Table 24-4 Lee's expenditures on food for three consecutive years, along with other values, are presented in the following table. -Refer to Table 24-4. To the nearest dollar, Lee's Year 2 food expenditures in Year 1 dollars amount to

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Question 42

The content of the basket of goods and services used to compute the CPI changes every month.

(True/False)

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Question 43

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

(True/False)

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Question 44

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

(Multiple Choice)

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Question 45

The Bureau of Labor Statistics determines which prices are most important to the typical consumer by surveying consumers.

(True/False)

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Question 46

Table 24-3 The following table lists the per gallon prices of gas and milk for the months of September, October, and November. Assume that the typical consumer buys 30 gallons of gas and 15 gallons of milk each month, and that September is the base period. Month Price of Gas (Dollars per gallon) Price of Milk (Dollars per gallon) September 3.50 3.50 October 3.85 3.52 November 4.25 3.58 -Refer to Table 24-3. What is the consumer price index for October?

(Multiple Choice)

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Question 47

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

(True/False)

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Question 48

If the price index was 90 in Year 1, 100 in Year 2, and 95 in Year 3, then the economy experienced

(Multiple Choice)

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Question 49

Archie has a savings account at a bank. If he earns 6 percent interest on his account and if there is deflation, then his purchasing power rises by more than 6 percent over the course of a year.

(True/False)

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Question 50

In 1931, President Herbert Hoover was paid a salary of $75,000. Government statistics show a consumer price index of 15.2 for 1931 and 237 for 2015. President Hoover's 1931 salary was equivalent to a 2015 salary of about

(Multiple Choice)

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Question 51

Suppose the Tooth Fairy paid 50 cents for a tooth in 1970. The CPI in 1970 was 38.8, while the CPI in 2010 was 218.1. What is the value of the Tooth Fairy's payment in 2010 dollars?

(Short Answer)

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Question 52

If the consumer price index was 100 in the base year and 107 in the following year, then the inflation rate was

(Multiple Choice)

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Question 53

The inflation rate is defined as the

(Multiple Choice)

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Question 54

If the nominal interest rates rises, then the inflation rate must have increased.

(True/False)

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Question 55

If the consumer price index was 93 in Year 1, 97 in Year 2, and 100 in Year 3, then the base year must be

(Multiple Choice)

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Question 56

If the inflation rate decreased from 3.33% to 2.90% between October and November, while the nominal interest rate increased from 4.75% to 4.80%, what is the real interest rate in November?

(Short Answer)

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Question 57

Table 24-2 The following table pertains to Wiskancia, an economy in which the typical consumer's basket consists of 15 pounds of apples and 7 teddy bears. Year Price of Apples (Dollars per pound) Price of Teddy bears (Dollars per toy) 1 14 7 2 12 5 3 15 9 -Refer to Table 24-2. The inflation rate was

(Multiple Choice)

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Question 58

Nate collected Social Security payments of $220 a month in Year 1. If the price index rose from 90 to 108 between Year 1 and Year 2, then his Social Security payments for Year 2 should have been

(Multiple Choice)

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Question 59

The CPI differs from the GDP deflator in that

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Question 60

Showing 41 - 60 of 214

Exam 24: Measuring the Cost of Living

Table 24-4 Lee's expenditures on food for three consecutive years, along with other values, are presented in the following table. ​ ​ -Refer to Table 24-4. To the nearest dollar, Lee's Year 2 food expenditures in Year 1 dollars amount to

The content of the basket of goods and services used to compute the CPI changes every month.

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

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

The Bureau of Labor Statistics determines which prices are most important to the typical consumer by surveying consumers.

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

If the price index was 90 in Year 1, 100 in Year 2, and 95 in Year 3, then the economy experienced

Archie has a savings account at a bank. If he earns 6 percent interest on his account and if there is deflation, then his purchasing power rises by more than 6 percent over the course of a year.

In 1931, President Herbert Hoover was paid a salary of $75,000. Government statistics show a consumer price index of 15.2 for 1931 and 237 for 2015. President Hoover's 1931 salary was equivalent to a 2015 salary of about

Suppose the Tooth Fairy paid 50 cents for a tooth in 1970. The CPI in 1970 was 38.8, while the CPI in 2010 was 218.1. What is the value of the Tooth Fairy's payment in 2010 dollars?

If the consumer price index was 100 in the base year and 107 in the following year, then the inflation rate was

The inflation rate is defined as the

If the nominal interest rates rises, then the inflation rate must have increased.

If the consumer price index was 93 in Year 1, 97 in Year 2, and 100 in Year 3, then the base year must be

If the inflation rate decreased from 3.33% to 2.90% between October and November, while the nominal interest rate increased from 4.75% to 4.80%, what is the real interest rate in November?

Nate collected Social Security payments of $220 a month in Year 1. If the price index rose from 90 to 108 between Year 1 and Year 2, then his Social Security payments for Year 2 should have been

The CPI differs from the GDP deflator in that

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 Nations 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

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Table 24-4 Lee's expenditures on food for three consecutive years, along with other values, are presented in the following table. -Refer to Table 24-4. To the nearest dollar, Lee's Year 2 food expenditures in Year 1 dollars amount to