Question : Table 9-2                                                Base Year (2006)                    2013 : 1388339

 

 

Table 9-2

 

                                               Base Year (2006)                    2013

Product

Quantity

Price

Price

Milk

  50

$1.20

$1.50

Bread

100

  1.00

  1.10

 

7) Refer to Table 9-2. Assume the market basket for the consumer price index has two products — bread and milk — with the following values in 2006 and 2013 for price and quantity: The Consumer Price Index for 2013 equals

A) 118.

B) 116.

C) 86.

D) 85.

 

Table 9-3

 

                                              Base Year (2006)                     2013

Product

Quantity

Price

Price

Cokes

100

$0.50

$0.75

Hamburgers

200

  2.00

  2.50

CDs

  10

20.00

21.00

 

8) Refer to Table 9-3.  Assume the market basket for the consumer price index has three products —  Cokes, hamburgers, and CDs — with the following values in 2006 and 2013 for price and quantity: The Consumer Price Index for 2013 equals

A) 75.

B) 93.

C) 108.

D) 121.

 

 

Table 9-4

 

                                            Base Year (2006)                                     2013               

Product

Quantity

Price

Quantity

Price

Meat

100

$10

120

$12

Potatoes

200

    2

180

    3

 

9) Refer to Table 9-4. Assume the market basket for the consumer price index has two products — meat and potatoes — with the following values in 2006 and 2013 for price and quantity:  The Consumer Price Index for 2013 equals

A) 125.

B) 129.

C) 135.

D) 141.

 

10) The percent increase in the CPI from one year to the next is a measure of the

A) GDP deflator.

B) unemployment rate.

C) real interest rate.

D) inflation rate.

 

 

11) Assume the average annual CPI values for 2012 and 2013 were 207.3 and 215.3, respectively. What was the percent increase in the CPI between these two years?

A) 0.96

B) 1.04

C) 3.86

D) 8.0

 

 

12) A consumer price index of 160 in 1996 with a base year of 1982-1984 would mean that the cost of the market basket

A) equaled $160 in 1996.

B) equaled $160 in 1983.

C) rose 160% from the cost of the market basket in the base year.

D) rose 60% from the cost of the market basket in the base year.

 

Table 9-5

 

Year

CPI

          2012

207

          2013

215

 

13) Refer to Table 9-5.  Consider the following values of the consumer price index for 2012 and 2013. The inflation rate for 2013 was equal to

A) 215 percent.

B) 21.5 percent.

C) 8.0 percent.

D) 3.9 percent.

 

 

Table 9-6

 

Year

CPI

          1996

157

          1997

161

          1998

163

 

14) Refer to Table 9-6. Consider the following values of the consumer price index for 1996, 1997, and 1998: The inflation rate for 1997 was equal to

A) 1.2 percent.

B) 2.0 percent.

C) 2.5 percent.

D) 4.0 percent.

 

 

15) Your grandfather tells you that he earned $7,000/year in his first job in 1961.  You earn $35,000/year in your first job in 2013.  You know that average prices have risen steadily since 1961.  You earn

A) 5 times as much as your grandfather in terms of real income.

B) more than 5 times as much as your grandfather in terms of real income.

C) less than 5 times as much as your grandfather in terms of real income.

D) less than 5 times as much as your grandfather in terms of nominal income.

 

16) If we want to use a measure of inflation that foreshadows price changes before they affect prices at the retail level, we would base our measure of inflation on

A) the producer price index.

B) the consumer price index.

C) the GDP deflator.

D) the household price index.

 

 

 

 

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