Exam 24: Measuring the Cost of Living

For an imaginary economy,the value of the consumer price index was 125 in 2009,and the inflation rate was 4.8 percent between 2008 and 2009.The consumer price index in 2008 was

If the cost of food & beverages increases by 20 percent,then,other things the same,the CPI is likely to increase by about

The nominal interest rate tells you how fast the number of dollars in your bank account rises over time.

The real interest rate is the interest rate corrected for inflation.

Which of the following statements is correct about the relationship between the nominal interest rate and the real interest rate?

If the CPI was 125 this year and 120 last year,then

During a certain year,the consumer price index increased from 150 to 159 and the purchasing power of a person's bank account increased by 3.5 percent.For that year,

In 1964,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?

If the current year CPI is 90,then the price level has decreased 10 percent since the base year.

Because the consumer price index reflects the goods and services bought by consumers better than the GDP deflator does,it is the more common gauge of inflation.

Table 24-3 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 24-3.The cost of the basket in 2006 was

In the basket of goods that is used to compute the consumer price index,which of the following categories of consumer spending is the smallest?

The consumer price index and the GDP deflator are two alternative measures of the overall price level.Which of the following statements about the two measures is correct?

An increase in the price of Irish whiskey regularly purchased by Americans will be reflected in

If the nominal interest rate is 7.5 percent and the rate of inflation is -2.5 percent,then the real interest rate is

In 1949,Sycamore,Illinois built a hospital for about $500,000.In 1987,the county restored the courthouse for about $2.4 million.A price index for nonresidential construction was 14 in 1949,92 in 1987,and 114.5 in 2000.According to these numbers,the hospital cost about

Table 24-1 The table below pertains to Pieway,an economy in which the typical consumer's basket consists of 10 bushels of peaches and 15 bushels of pecans. -Refer to Table 24-1.The cost of the basket in 2006 was

Henri earned a salary of $50,000 in 2001 and $70,000 in 2006.The consumer price index was 177 in 2001 and 265.5 in 2006.Henri's 2001 salary in 2006 dollars is

In the calculation of the CPI,coffee is given greater weight than tea if

Table 24-5 The table below pertains to Yackandsnack,an economy in which the typical consumer's basket consists of 2 cell phones and 20 ham sandwiches. -Refer to Table 24-5.The cost of the basket