Exam 24: Measuring the Cost of Living

In 1972 in Riverside,Iowa one could buy a bag of chips,a pound of hamburger,a package of buns,and a small bag of charcoal for about $2.50.If the same goods today cost about $6.00,which pair of CPIs would make the cost in today's dollars the same for both years?

Suppose today's CPI is 134.85,and today one must spend $580 to purchase the same basket of goods and services that could be bought for $400 in 1989.Then the CPI in 1989 was

The CPI accounts for changes in the prices of imports and the GDP deflator does not.Therefore,the CPI is based on more goods and services than the GDP deflator.

The inflation rate is computed as 100 times (the current year CPI minus the CPI of the previous year)divided by the CPI of the previous year.

The basket of goods in the consumer price index changes

The 2005 CPI was 196 and the 1982 CPI was 96.5.If your parents put aside $1,000 for you in 1982,how much would you have needed in 2005 in order to buy what you could have bought with the $1,000 in 1982?

The economy's inflation rate is the

In the United States,nominal interest rates were high in the

Assume an economy experienced a positive rate of inflation between 2003 and 2004 and again between 2004 and 2005.However,the inflation rate was lower between 2004 and 2005 than it was between 2003 and 2004.Which of the following scenarios is consistent with this assumption?

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

Samantha deposits $1,000 in a saving account that pays an annual interest rate of 4 percent.Over the course of a year the inflation rate is 1 percent.At the end of the year Samantha has

Tiffany is offered a Job in Minneapolis that pays $80,000.She is offered a similar job in Memphis that pays $64,000.Which set of CPIs would make the two salaries have almost the same purchasing power?

Which of the following agencies calculates the CPI?

The market basket used to calculate the CPI in Aquilonia is 4 loaves of bread,6 gallons of milk,2 shirts and 2 pants.In 2005,bread cost $1.00 per loaf,milk cost $1.50 per gallon,shirts cost $6.00 each and pants cost $10.00 per pair.In 2006,bread cost $1.50 per loaf,milk cost $2.00 per gallon,shirts cost $7.00 each and pants cost $12.00 per pair.Using 2005 as the base year,what was Aquilonia's inflation rate in 2006?

Which of the following is the most accurate statement?

Ruth collected Social Security payments of $220 a month in 1985.If the price index rose from 90 to 105 between 1985 and 1986,then her Social Security payments for 1986 should have been about

If the nominal interest rate is 8 percent and the rate of inflation is 3 percent,then the real interest rate is

In 1964 in Riverside,California,one could buy a chili-dog and a root beer for $1.25.Today the same chili dog and root beer cost $2.95.Which pair of CPIs would imply that the cost in today's dollars was the same for both meals?

Which of the following is the most accurate statement about real and nominal interest rates?

Which among the following statements is correct about the relationship between inflation and interest rates?