The Consumer Price Index (CPI) exhibits four known biases. Three of these biases occur, because the CPI is calculated based on a basket of goods year-to-year. This calculation to compare CPI values year-to-year and calculate the inflation rate. approach makes it Ofixed; more difficult O variable; more difficult O fixed; easier O variable; easier

The Consumer Price Index (CPI) exhibits four known biases. Three of these biases occur, because the CPI is calculated based on a basket of goods year-to-year. This calculation to compare CPI values year-to-year and calculate the inflation rate. approach makes it Ofixed; more difficult O variable; more difficult O fixed; easier O variable; easier

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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YSTEM (ACADEMIC) es of Macroeconomics|| Spring21 There are no costs associated with inflation if the inflation rate is perfectly anticipated. Select one: O True O False ho 40 %23 $24 & 3. 4 6. 7. 8. 6.
ning Time: 09 minutes, 39 seconds. tion Completion Status: O E. frictional, cyclical, and structural unemployment. QUESTION 6 Suppose an individual earned a salary of $12,000 in 1970. If the CPI was 38.8 in 1970 and 258.8 in 2020, then the value of this individual's salary in 2020 dollars is approximately O A. $80,041. O B. $71,456. OC. 593,381. O D.$1,799. O E. $60,398. QUESTION7 If real GDP remains constant we know for sure that O A. output has declined. O B. output has risen but prices have remained constant. O C. prices have remained constant. O D. output has remained constant. O E. output has risen. QUESTION 8 All of the following factors have contributed to the rapid expansion of international trade since the 1980s, except for O A. progress in communications. O B. trade agreements. Click Save and Submit to save and submit. Click Save All Answers to save all answers.
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↑ Inflation Measure WPI Headline WPI Headline 1 WPI Food 0.34 WPI Core 0.82 CPI Headline 0.32 CPI Food 0.41 CPI Core -0.04 Inflation Measure WPI Headline WPI Food WPI Core CPI Headline CPI Food CPI Core WPI Headline 1 0.55 0.93 0.58" 0.34" 0.77" A: 1997 02-2008 04 WPI Food WPI Core CPI Headline CPI Food CPI Core 1 0.20 0.90 0.93 0.63 1 0.09 0.26 -0.32 B: 2009 01-2019 04 WPI Food WPI Core CPI Headline CPI Food CPI Core 1 0.27 0.91" 0.89 0.74* 1 0.39 0.10 0.67* Revisit Later 1 0.94 0.81 1 0.92* 0.86* 1 0.58 1 0.61* 1 1 Table 2: Correlation matrix of inflation measures (Please ignore the meaning of the * sign) Q. Based on Table 2, we can draw the conclusion that- Select an option & Clear Response The direction of movement between CPI core and WPI headline is not necessarily the same across the years Post 2008, WPI core and WPI headline have moved in opposite directions Prior to 2009, the correlation between WPI core and WPI headline has been very weak Post 2008, CPI core and WPI headline…
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Which of the following statements explains inflation rate? O a. Inflation rate is useful for knowing the labor force O b. Inflation rate is calculated from consumer price index O. Inflation rate is expressed per 1000 units O d. Inflation rate is used in determining depreciation
QUESTION 20 Table: The table below is for an imaginary economy of Orangeland where a typical consumer basket consists of 2 blankets and 10 coffees. Price of a Price of a Year Blanket Coffee 2017 $40 $3 2018 $45 $4 2019 $50 $5 Refer to Table. If the base year is 2018, then the economy's inflation rate in 2019 was O a. 15.38 percent. O b. 13.98 percent. Oc. 25.00 percent. O d. 20.00 percent.
A period of time against which costs of the market basket in other periods will be compared in computing a price index is called O the inflation period. O the market basket. O the adjustment period. O the base period
The reference base period is a period for which the is defined to equal Currently, the reference base period is 1982-1984. O A. inflation rate; 1 percent O B. PPI; 110 O C. interest rate; 1 percent O D. CPI; 100 Click to select your answer. DI
In 2020 and in 2021, consumers in Dexter consumed only books and pens. The prices and quantities for 2020 and 2021 are listed in the table. The reference base period for Dexter's CPI is 2020, and 2020 is also the year of the Consumer Expenditure Survey. Calculate the inflation rate in 2021. The inflation rate in 2021 is A. 121.7 B. 73.0 C. 21.7 D. 4.6 percent. ID Item Books Pens 2020 2021 Price Quantity Price Quantity 10 $5 7 $4 $5 5 8 $9
What is the value of the CPI in the base period? The value of the CPI in the base period O A. can be greater than, equal to, or less than 100 O B. is 100 no matter what reference base period is chosen C. changes when the reference base period changes D. is relevant only if the base period is within the last 10 years
The average price of tuition and fees at private 4-year colleges and universities increased from $8,300 in 1991 to $23,000 in 2006. Calculate the relative change in price from 1991 to 2006 and compare it to the overall rate of inflation as measured by the Consumer Price Index. Average tuition and fees in private 4-year colleges and universities increased by ■%. (Round to the nearest integer as needed.) Average Annual Consumer Price Index (CPI) (1982- 1984=100) Year CPI Year CPI Year CPI 1976 56.9 1989 124.0 2001 177.1 1977 60.6 1990 130.7 2002 179.9 1978 65.2 1991 136.2 2003 184.0 1979 72.6 1992 140.3 2004 188.9 1980 82.4 1993 144.5 2005 1981 90.9 1994 148.2 2006 1982 96.5 1995 152.4 2007 1983 99.6 1996 156.9 1984 103.9 1997 160.5 2009 1985 107.6 1998 163.0 2010 109.6 1999 166.6 2011 1986 1987 113.6 2000 172.2 2012 1988 118.3 195.3 201.6 207.3 2008 215.3 214.5 218.1 224.9 229.6