Exam 16: The Cpi and the Cost of Living

Constructing the CPI involves which of the following stages? I. conducting the monthly price survey Ii. converting the CPI to an international index Iii. selecting CPI market basket

Suppose the Bureau of Labor Statistics uses Ballpark Franks as the hot dogs used when calculating the consumer price index. During 2012, Oscar Mayer aggressively reduces prices. Consumers respond by purchasing more Oscar Mayer and less Ballpark Franks. The 2012 CPI is likely to

If the CPI is 231.4 in one year and is 241.2 in the next year, then the inflation rate equals

Suppose the base reference period is 1982-1984. If your nominal wage rate is $8.00 per hour when the CPI is 180, what is your real wage rate in 1982-1984 dollars?

What, if any, is the impact of the CPI bias on government spending and taxes?

The CPI was 170 last year and is 190 this year. What is the inflation rate between these two years?

Define the nominal interest rate and the real interest rate. Discuss the relationship between the nominal interest rate and the real interest rate.

What are the three stages of constructing the CPI?

The formula for the CPI is

An example of the commodity substitution bias in the calculation of the CPI is a price increase in

What is the commodity substitution bias? What effect does it have on the CPI?

GDP Data for 2010 (billions of dollars) Data for 2010 (billions of dollars) Nominal GDP 3,300 4,200 Real GDP 3,300 3,600 -The table above has real and nominal GDP for two years for a foreign country. a. What does the GDP price index equal in 2010? What does the value of the GDP price index tell you about 2010? b. What does the GDP price index equal in 2011?

Suppose the CPI in 1983 is 100 and the CPI this year is 172. These values for the CPI mean that

If you are earning $20,000 this year and the CPI is 165, your real income in base year prices is

When calculating the CPI, the Bureau of Labor Statistics

The quality change bias is most likely to put ________ into the CPI and so ________ the inflation rate.

The price survey of the goods contained in the CPI market basket is conducted

When the nominal price of a good increases over time, must its real price also increase?

When the price of broccoli increase relative to cauliflower, people who buy fresh vegetables respond by buying more cauliflower and fewer broccoli. As a result, the CPI has a

-The table above has information about the CPI, nominal wage rate, and nominal interest rate for the country of Syldavia for the years 2010 to 2012. The reference base year is 2011. The inflation rate in Syldavia from 2011 to 2012 was