1. Suppose typical urban households bought their basket of consumer goods and services for$20,000 in the base year and in the current year they have to spend $64,000 for that samebasket. Calculate current year CPI. (Show your work)(64,000/20,000)X100- CPI- 3202. What does the CPI you found in Q1 tell you about how much prices changed from the base yearto the current year?

The CPI or consumer price index is the measure of the change in the prices of the consumer basket of…

Answered: 1. Suppose typical urban households…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: Measuring The Cost Of Living

Section: Chapter Questions

Problem 1QR

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Question 4 Between 2015 and 2016, the CPI of a small nation rose from 1.82 to 1.85. If household incomes rose by 3% during that period of time, which of the following is true? O The purchasing power of household income fell between 2015 and 2016. O The purchasing power of household income rose between 2015 and 2016. O The purchasing power of household income remained constant between 2015 and 2016. O The CPI cannot be used to determine how the purchasing power of household income changes over time.
Questions: 1. Compute the total costs for all the years (2017 to 2020). 2. Compute the price index for each year using 2019 as the base year. 3. Compute the inflation rate for each year. NOTE: Explain and support the answer with calculations.
7. For the consumer price index values shown, calculate the rate of inflation in each year from 1930 to 1933. What is unusual about this period, relative to recent experience? Year 1929 1930 1931 1932 1933 CPI 14.2 14.0 12.7 11.5 10.9
2018 2019 Item Quantity Price Quantity Price Books 10 €30 8 €50 Pens 20 €1 15 €2 In 2018, consumers in a hypothetical economy consumed only books and pens. The prices and quantities for 2018 and 2019 are listed in the table above. The reference base period is 2018. Calculate the CPI in 2019. Give only a numerical answer. Where needed, use only a point () for decimals (e.g., 3.25, not 3,25) and no thousands separator (e.g., 2000, not 2,000).
10. how much would it cost?
In an imaginary economy, a typical consumer basket consists of 40 candles and 15 lighter. You are given the price of these two products in three subsequent years. Price of a Candle Price of a Lighter $14 $1 $15 $2 $17 $3 2017 2018 2019 Find out the CPI for 2017, 2018, and 2019. Assume the base year is 2017. Note: Make sure to show all the steps. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph Arial 44 † {} P 57 ky X² X₂ 10pt ¶ ¶ ABC !!! A ¶ "Ω A Tx X x Q5 AA : * HA 旺图 O WORDS POWERED BY TINY
Congratulations! Your boss has given you a raise. However, you want to know whether your purchasing power has increased, since inflation is also rising. The table below gives you data for wages and the Consumer Price Index (CPI) for the last two years. Wage ($/day) CPI Year 1 $ 2000 CPI 120 Year 2 $2200 CPI 129.6 The nominal percentage increase in your wage is enter your response here%. (Round your answer to one decimal place.) Part 2 The real percentage increase in your wage is enter your response here%. (Round your answer to one decimal place.)
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4. In each of the following cases, explain clearly how the CPI might misrepresent changes in consumer prices (Commodity substitution bias, Introduction of new goods, or Unmeasured quality changes). In each case, speculate as to whether CPI overstates or understates consumer expenses. (a) By 1990, expensive personal computers became a common expenditure in consumers’ baskets. However, some governments were still calculating the consumer’s basket using a 1975 survey. (b) Between 2007 and 2015, there were significant improvements in smartphones.
In 1970 a movie ticket cost US$2.00. Today, a movie tickets costs NZ$15.00 You also have the following data SUS/$NZ CPI 1970 2022 1.10 65 0.60 1122 What is the percentage change in the nominal value of a movie ticket? (Enter the numerical value only - do not include the "%" symbol)
4. In a simple economy, people consume only 2 goods, food and clothing. The market basket of goods used to compute the CPI consists of 50 units of food and 10 units of clothing. Food Clothing 2021 price per unit $4 $10 2022 price per unit $6 $20 (1) What is the cost of basket in each year? (2) Compute CPI in each year using 2021 as base year.
1- The following table shows the price and quantities consumed. The base year is 2001. Year Price of bread $1 Quantity of Price of toys Quantity of toys 300 Quantity of рepsi Price of bread 2001 2002 2003 рepsi $0.7 $08 $0.75 500 $5 $10 $10.5 300 600 590 200 210 400 $1.05 420 a- Calculate the value of the CPI in 2001, 2002, and 2003. b- Calculate the inflation rate between 2001 and 2002 and between 2002 and 2003, using the CPI.

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