your rate may vary.a) suppose a student in 2007 estimated that her expenses were distributed among the CPI categories as listed in Table 5.6. (She had no housing expenses since she lived at home.) Calculate the inflation rate she would have experienced relative to the year before. b) compare the answer in (a) to the northeast urban average of 2.58% and explain why the rate the student experienced was higher or lower. **Table 5.2. Consumer Price Index Market Basket**This table provides an overview of the Consumer Price Index (CPI) market basket. It includes different categories of consumer expenses, their relative weights in percentage terms, and the percentage change from 2006 to 2007.- **Category**: The type of goods or services.- **Weight (%)**: The relative importance of each category in the CPI.- **2006–2007 Change (%)**: The percentage change in price for each category between 2006 and 2007.**Categories and Data:**1. **Food and Beverages** - Weight: 15.009% - Change: 4.0% 2. **Housing** - Weight: 44.377% - Change: 3.0% 3. **Apparel** - Weight: 3.697% - Change: -1.5% 4. **Transportation** - Weight: 16.030% - Change: 1.2% 5. **Medical Care** - Weight: 5.780% - Change: 4.8% 6. **Recreation** - Weight: 5.387% - Change: -0.4% 7. **Education and Communication** - Weight: 6.455% - Change: 2.7% 8. **Other Goods and Services** - Weight: 3.265% - Change: 2.6% 9. **All Items** - Weight: 100% - Change: 2.58% This table is a useful tool for understanding how different categories of consumer goods and services contribute to overall inflation as measured by the CPI. **Table 5.6. How One Student Spent Her Income**| Category | Weight (%) | 2006–2007 Change (%) ||------------------------------|------------|-----------------------|| Food and beverages | 15 | 4.0 || Housing | 0 | 3.0 || Apparel | 15 | -1.5 || Transportation | 25 | 1.2 || Medical care | 5 | 4.8 || Recreation | 10 | -0.4 || Education and communication | 15 | 2.7 || Other goods and services | 15 | 2.6 |**Total Weight: 100%****Explanation:**This table provides a breakdown of the spending habits of one student across different categories, expressed as a percentage of total income. The "Weight (%)" column indicates how much of the student's total income is allocated to each category. The "2006–2007 Change (%)" column reflects the percentage change in spending in each category from 2006 to 2007.Key Observations:- The highest allocation of spending is on Transportation (25%).- Medical care saw the largest positive percentage change (4.8%) from 2006 to 2007.- Apparel spending decreased by 1.5%.- No income was allocated to Housing, suggesting alternative living arrangements or support.

Inflation refers to the gradual rise in general price level in an economy over a period of time .…

a) suppose a student in 2007 estimated that her expenses were distributed among the CPI categories as listed in Table 5.6. (She had no housing expenses since she lived at home.) Calculate the inflation rate she would have experienced relative to the year before. b) compare the answer in (a) to the northeast urban average of 2.58% and explain why the rate the student experienced was higher or lower.

a) suppose a student in 2007 estimated that her expenses were distributed among the CPI categories as listed in Table 5.6. (She had no housing expenses since she lived at home.) Calculate the inflation rate she would have experienced relative to the year before. b) compare the answer in (a) to the northeast urban average of 2.58% and explain why the rate the student experienced was higher or lower.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question The CPI in 2000 for a basket of goods was CP 2000 = 133.2 The CPI in 2010 for the same basket of goods was CP/2010=121.8 What was the inflation rate in 2010? Round your answer to the nearest hundredth of a percent. Do NOT round until you have calculated the final answer. Provide your answer below:
Which of the following was a way for the Bureau of Labor Statistics to reduce the quality/new good bias in its calculation of the CPI? Remove energy and food prices. Allow for some substitution amongst products. Update the list of products included in the CPI more often and rapidly. Automatically reduce the inflation by 0.5% to account for quality/new good bias.
because most businesses do not experience inflation as reflected by the market basket used to measure the CPI, a different index is used for provider of goods and services. which price index generally provides a better measurement of the inflation effects for particular business or for the purchase of particular equipment than the CPI? A) Business B) distributor C) manufacturer D) producer E) provider F) purchaser G) retail H) seller I) supplier J) vendor K) none of these
The nominal interest rate is 3% in the economy. Shawn is deciding to give loan to his friend at this rate. The prevailing inflation rate is 2.5% Should Shawn give loan to his friend or not?
In the first Super Bowl in early 1967, the winners earned prize money of $15,000. In January of 1967, the CPI was 32.9. In January of 2018, the CPI was 247.87. Earning $15,000 in 1967 would have been like earning how much in 2018 (using our CPI numbers to do the conversion)? Group of answer choices a) $15,000 b) approximately $113,011 c) approximately $95,717 d) approximately $110,717 e) approximately $114.78
Period 1 Period 2 (base year) Period 3 Price Level Output Population 6 3 2 1 2 4 9 4 7 Use the above information to calculate the percent change in CPI between period 1 and 2. Express your answer as a decimal (rounded to the nearest thousandth).
Suppose Cho is a cinephile and buys only movie tickets. Cho deposits $3,000 in a bank account that pays an annual nominal interest rate of 10%. Assume this interest rate is fixed—that is, it won't change over time. At the time of her deposit, a movie ticket is priced at $15.00. For each of the annual inflation rates given in the following table, first determine the new price of a movie ticket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Cho's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest movie ticket. For example, if you find that the deposit will cover 20.7 movie tickets, you would round the purchasing power down to 20 movie tickets under the assumption that Cho will not buy seven-tenths of a movie ticket. Number of tickets Cho can purchase options:…
Suppose a person works hard at a job after graduation and after her first year, her effort is rewarded with a 3% raise when the average wage increase in her company is 2%. Later, the government releases its inflation report and says that the inflation rate is 7%. Given this information, which of the following is true regarding her standard of living? Her standard of living has improved because the 3% raise is enough to offset the average rise in prices. Her standard of living did not improve because the purchasing power of her income is less than it was last year. Her standard of living has remained the same because the rate of inflation does not influence purchasing power. Her standard of living has increased by the amount of inflation, namely, 7%.
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The base year is 2010. If the CPI today is 199, what does this mean about consumer prices? A) They have increased by 199% since 2010 B) They have increased by 99% since 2010 C) They have decreased by 199% since 2010. D) They have decreased by 99% since 2010
13. In 2018 your annual salary was $54,370 per year and the CPI was 133.4. In 2022 your annual salary was $59,140 and the CPI was 151.2. a. What should your annual salary have been in 2022 if your 2018 annual salary increased at the rate of inflation from 2018 to 2022? Round your answer to the nearest dollar. b. By what percent was your actual 2022 salary above or below your inflation adjusted salary from part (a)? You must specifically state whether it was above or below the inflation adjusted salary. (answer as a % to 2 decimals)
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