Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 24, Problem 5QCMC
To determine
Calculation of present worth of a dollar.
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If the CPI is 200 in year 1980 and 300 today,then $600 in 1980 has the same purchasing power as__________today.
a.$400
b.$500
c.$700
d.$900
Below are the values of the CPI for each year from 1992-1996. For each year, beginning with 1993,
calculate the rate of inflation from the previous year.
Year
CPI
1992
1.40
1993
1.45
1994
1.48
1995
1.52
1996
1.57
Please enter your answers as percentages rounded to the nearest tenth of a percent (ie. if your
answer in your calculator is 0.02644 enter your answer as 2.6 or 2.6% not 3%, 2.644, or 0.026).
What is the inflation rate from 1992 - 1993?
What is the inflation rate from 1993-1994?
What is the inflation rate from 1994-1995?
What is the inflation rate from 1995-1996?
Suppose the current CPI is 252 and in 2005 it was 196. A pair of Levi's jeans costs $43 today. Based
on the CPIs, what would you expect the 2005 price to have been for the same style of Levis, in a
similar retail outlet? Round your answer to two decimal places.
0
$
Click or tap the numbers or use your keyboard to type. If you're not sure, just take a guess.
1 2 3 4 5
6 7 8 9
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Chapter 24 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
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Similar questions
- Suppose the current CPI is 252 and in 2005 it was 196. A pair of Levi’s jeans costs $43 today. Based on the CPIs, what would you expect the 2005 price to have been for the same style of Levis, in a similar retail outlet?arrow_forwarda) In 2015 (the base year), the representative consumer bought 20 cinema tickets at $12 each, and 1 laptop computer at a price of $500. In 2016, the price of cinema tickets rose to $15 each and the price of a laptop rose to $550. Calculate the inflation rate between 2015 and 2016. b) List the three types of biases of the consumer price index (CPI). If using the price index presented above, provide examples for how each of these three biases would apply to the measured level of inflation for the year 2020 (no calculations necessary).arrow_forwardThe 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 215.3 214.5 218.1 224.9 229.6arrow_forward
- Refer to the following table. Suppose the CPI basket consists of 10 pies of pizza and 20 bottles of milk respectively, and 2020 is the base year. Year Price of pizza Price of milk 2020 $250 $40 2021 $280 $45 a. Calculate the CPI in 2020 and 2021 respectively. What is the inflation rate in 2021? b. Suppose the minimum wage is $37.5 per hour in 2020, how much would it be in 2021 in order to maintain the same purchasing power in 2020? c. Which one do you think is a better measure of a household's cost of living, CPI or GDP deflator? Why?arrow_forwardWhat would $1 in 1966 be worth today in 2021? A) $ 7.71 B) $ 7.92 C) $ 8.07 D) $ 8.93arrow_forwardHow does the CPI compare the cost of the typical market basket of goods and services?arrow_forward
- Refer to the table (attached image). This country produces only two goods, CDs and books. You are told that the CPI for this country in 2012 was 141. If the base year is 2011, how many books should be present in the basket of goods and services that was used to calculate the CPI? CHOOSE ONE: •A. 68 •B. 78 •C. 60 •D. 84arrow_forwardAt the end of 1989, the consumer price index was 105. At the end of 1990, the CPI was 110. Calculate the inflation rate between these two periods.arrow_forwardIn an imaginary economy, a typical consumer basket consists of 40 candles and 15 lighter. You are given the price of these two products in three subsequent years. Price of a Candle Price of a Lighter $14 $1 $15 $2 $17 $3 2017 2018 2019 Find out the CPI for 2017, 2018, and 2019. Assume the base year is 2017. Note: Make sure to show all the steps. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph Arial 44 † {} P 57 ky X² X₂ 10pt ¶ ¶ ABC !!! A ¶ "Ω A Tx X x Q5 AA : * HA 旺图 O WORDS POWERED BY TINYarrow_forward
- Which of the following statements about the CPI is true? How does the PCEPI differ from the CPI? The CPI _______. A. has a bias of approximately 2.0 percentage points a year B. is a measure of the change in the amount of money that people need to spend to achieve a given standard of living C. measures all the changes in the cost of living D. is a relatively useless measure because every year new goods become available and some old goods disappear The PCEPI _______. A. uses the same market basket as the CPI but gives a greater weight to sticky-price items B. introduces even more biases into the inflation rate than the CPI C. excludes the prices of food and energy D. uses the prices of goods and services included in the consumption expenditure component of GDParrow_forwardThe CPI in 2021 equals _______. A. 51.4 B. 100.0 C. 74.0 D. 194.7arrow_forwardIf the CPI rises from 103.4 to 108.8, how much money at the start is required to have the same purchasing power as $89 at the end? Select one: a. $89.87 b. $93.65 c. $97.76 d. none Checkarrow_forward
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