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Exam 24: Measuring the Cost of Living

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Question 171

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If the cost of transportation increases by 20 percent,then,other things the same,the CPI is likely to increase by about

A) 0.3 percent.
B) 1.7 percent.
C) 3.4 percent.
D) 10 percent.

E) B) and C)
F) C) and D)

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Question 172

Multiple Choice

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On goods and services,Harry spent $32,000 in 2004 and $39,000 in 2009.The consumer price index was 192 for 2004 and 217 for 2009.Harry's 2004 spending in 2009 dollars is about

A) $34,507.
B) $35,667.
C) $36,167.
D) $37,578.

E) C) and D)
F) B) and C)

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Question 173

Multiple Choice

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The consumer price index and the GDP deflator are two alternative measures of the overall price level.Which of the following statements about the two measures is correct?

Table 24-1 The table below shows the prices of baseballs and baseball bats for three years.Assume the typical consumer's basket consists of 6 baseballs and 2 baseball bats. -Refer to Table 24-1.The inflation rate was

When a new good is introduced,consumers have more variety from which to choose,and this in turn increases the cost of maintaining the same level of economic well-being.

Bob deposits $100 in a bank account that pays an annual interest rate of 5 percent.A year later,Bob withdraws his $105.If inflation was 7 percent during the year the money was deposited,then Bob's purchasing power has increased by 2 percent.

In 1970,Professor Plum earned $12,000;in 1980,he earned $24,000;and in 1990,he earned $36,000.If the CPI was 40 in 1970,60 in 1980,and 100 in 1990,then in real terms,Professor Plum's salary was highest in

Dewey earned a salary of $75,000 in 2001 and $95,000 in 2006.The consumer price index was 177 in 2001 and 266 in 2006.Dewey's 2006 salary in 2001 dollars is

When box office receipts are not corrected for inflation,

For any given year,the CPI is the price of the basket of goods and services in the

John just graduated law school and has two competing job offers.The first is in Phoenix and pays a salary of $150,000.He has a similar job offer in Cleveland that pays $90,000.Which pair of CPIs would make the two salaries have the same purchasing power?

The real interest rate tells you how fast the purchasing power of your bank account rises over time.

The CPI for 2008 is computed by dividing the price of the basket of goods and services in 2008 by the price of the basket of goods and services in the base year,then multiplying by 100.

Table 11-5 The table below pertains to Napandsnack,an economy in which the typical consumer's basket consists of 2 pillows and 15 hotdogs. -Refer to Table 11-5.If the base year is 2011,then the CPI

To calculate the CPI,the Bureau of Labor Statistics uses

The relative importance of housing in the breakdown of consumer spending is

Henri earned a salary of $50,000 in 2001 and $70,000 in 2006.The consumer price index was 177 in 2001 and 265.5 in 2006.Henri's 2006 salary in 2001 dollars is

Table 11-2 The table below pertains to Iowan,an economy in which the typical consumer's basket consists of 3 pounds of pork and 4 bushels of corn. -Refer to Table 11-2.If 2009 is the base year,then the inflation rate in 2009 was

Consumer price index = * 100.

The purpose of measuring the overall level of prices in the economy is to permit comparison between dollar figures from different times.