Government survey takers determine that typical family expenditures each month in the year designated as the base year are as follows: . 25 pizzas, $10 each Apartment rent, $600 per month . Gasoline and car maintenance, $100 per month 16 . Phone service (basic service plus 10 long-distance calls), $50 per month In the year following the base year, the survey takers determine that pizzas have risen to $11 each, apartment rent is $700, gasoline and maintenance costs are $120, and phone service has dropped in price to $40. Instructions: Enter your responses by rounding the CPI to three decimal places and the rate of inflation to one decimal place. a. Find the CPI in the subsequent year and the rate of inflation between the base year and the subsequent year. CPI: Rate of inflation: 1% b. The family's nominal income rose by 5 percent between the base year and the subsequent year. Are they worse off or better off in terms of what their income is able to buy? The family is (Click to select)

Government survey takers determine that typical family expenditures each month in the year designated as the base year are as follows: . 25 pizzas, $10 each Apartment rent, $600 per month . Gasoline and car maintenance, $100 per month 16 . Phone service (basic service plus 10 long-distance calls), $50 per month In the year following the base year, the survey takers determine that pizzas have risen to $11 each, apartment rent is $700, gasoline and maintenance costs are $120, and phone service has dropped in price to $40. Instructions: Enter your responses by rounding the CPI to three decimal places and the rate of inflation to one decimal place. a. Find the CPI in the subsequent year and the rate of inflation between the base year and the subsequent year. CPI: Rate of inflation: 1% b. The family's nominal income rose by 5 percent between the base year and the subsequent year. Are they worse off or better off in terms of what their income is able to buy? The family is (Click to select)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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please see attachment
Assuming that a household in Hadililand consumes only apple juice and T-shirts. Last year, which was the base year, the household spent $440 on juice and $132 on shorts. In the base year, juice was $2.2 a bottle and shorts were $11 a pair. This year, juice is $3.3 a bottle, shorts are $13.2 a pair, and a typical household has bought 198 bottles of juice and 15 pairs of shorts. a) What is the basket used in the CPI? b) Calculate the CPI in the current year. c) Calculate the inflation rate in the current year. d) Is the inflation rate that you've calculated likely to be biased? Why or why not?
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