ECNS 202 PRINTOUT
8th Edition
ISBN: 9781337096584
Author: Mankiw
Publisher: CENGAGE L
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Question
Chapter 11, Problem 2QR
To determine
Reason whyCPI is an imperfect measure of the cost of living.
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Describe the three problems that make the CPI animperfect measure of the cost of living.
Over a long period of time the CPI rose from 100 to 150. What does a CPI of 150 mean? If the price of imported vegetables rises, between the CPI and the GDP deflator, which one of the two will be affected more? Explain.
How does the CPI compare the cost of the typical market basket of goods and services?
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- In year 1, your annual income is 45,000 and the CPI is 143.6; in year 2, your annual income is 51,232 and the CPI is 150.7. Has your real income risen, fallen, or remained constant? Explain your answer.arrow_forwardDescribe how the CPI is calculated. How might the CPI overstate the true increase in cost of living?arrow_forward
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