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- 6) a. The Consumer Price Index (CPI) is determined by estimating the prices of goods and services in the economy at the same rate as the cost of living increases. comparing the value of a market basket of goods that consumers typically purchase to the value of the basket in cities around the country. averaging all the prices of goods and services in the economy. comparing the value of a market basket of goods that consumers typically purchase to the value of the basket in a base year. b. The Bureau of Labor Statistics (BLS) would calculate the rate of inflation for year 5 by adding the CPI of year 4 to the CPI of year 5, and then dividing by 2. adding the CPI of year 4 to the CPI of year 5, and then dividing by the average of year 4 and year 5. subtracting the CPI of year 4 from the CPI of year 5, and then dividing by the CPI of year 5. subtracting the CPI of year 4 from the CPI of year 5, and then dividing by the CPI of year…3A hypothetical country of Narnia produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown in the following table. The base year is 2017. Year 2016 2017 2018 2019 Price (Dollars per movie) 7.6% 7.5% Movies 7.2% 7% 10.00 11.00 12.00 12.00 Quantity Quantity (Movies) (Dollars per bag) (Bags) 500 600 650 625 Popcorn Refer to Table 23-5. What was the rate of inflation for Narnia in 2019? (Hint: round-off to the nearest decimal point) Price 5 4 5 6 1,000 900 950 925
- 2) A & BIf the price level falls, then the value of a dollar: A. Rises so people will buy more B. Rises so people will buy less C. Falls so people will buy more D. Falls so people will buy less4. A measure of the degree to which capital wears out or becomes obsolete during a period is: A) rent. B) production costs. C) deferred expenditure. D) depreciation. 5. Which of the following would not be included in the measurement of GDP? A) federal government payments for Jeeps B) a purchase of California wine by a Canadian firm C) employers' payments for employees' medical insurance D) transactions in the underground economy 6. Aggregate demand is the total value of real GDP that A) all sectors of the economy are willing to purchase at various average price levels, all other things unchanged. B) all sectors of the economy are willing to sell at various average price levels, all other things unchanged. C) consumers are willing to purchase at various average price levels, all other things unchanged. D) consumers are willing to purchase…
- QUESTION 2 The table below gives the values of different expenditures in the United States during 1999. Answer the following questions about the United States b) Calculate the value of net exports of goods and services in 1999? c) Calculate (nominal) GDP equal to in 1999? d) What was the (nominal) value of total production equal to in 1999? Note: 1 please type clearly answer no b,c,d 2. No need hand writing10. Factors that influence standard of living Which of the following factors played the biggest role in the slow growth of average incomes in the United States during the 1970s and 1980s? A-Disinflation of the dollar B-Slow growth in productivity C-Increased competition from India D-Increased competition from Japan 11. Inflation and unemployment Suppose that the government believes the economy is producing goods and services beyond its optimal level. The government therefore decides to decrease the quantity of money in the economy. This monetary policy_______ the economy's demand for goods and services, leading to________ product prices. In the short run, the change in prices induces firms to produce______ goods and services. This, in turn, leads to a_______ level of unemployment. In other words, the economy faces a trade-off between inflation and unemployment: Lower inflation leads to________ unemployment. 12. Economic models…1. Key facts about economic fluctuations The following graph approximates business cycles in the United States from the first quarter of 1953 to the third quarter of 1957. The vertical blue bar coincides with periods of 6 or more months of declining real gross domestic product (real GDPP). 2700 200 2000 W 2400 2300 1950 1954 1965 1956 1957 YEAR Source: "Current dollar and Real GDP" Bureau of Economics Analysis, last modihed May 1, 13, accessed May 15, 13, http://www.bea.gov/national/xds/gdplev.ds. Notice that real GDP trends upward over time but experiences ups and downs in the short run. A period of declining real GDP, such as the blue-shaded period in 1953, is known as True or False: Small ups and downs in real GDP follow a consistent, predictable pattern. O frue O False Which of the following probably occurred as the U.S. economy experienced declining real GDP in 19537 Check all that apply ORetail sales declined. O Home sales increased. O Industrial production increased. O Consumer…