Exam 8: The Price Level and Inflation

Your entertainment price index EPI) was computed based on three goods: movie tickets, popcorn, and limeade. If you change the quantity of these goods from this year to next year and the prices of two of the three goods increase while the other price falls, then your EPI

The signing of long-term wage and price agreements and the relationship to inflation most likely raises the issue of

If the price of industrial plastic injection molding machines rose by 20 percent and the price of oranges fell by 20 percent, then

How do you convert a price of a good from an earlier time into today's price?

The equation M *V = P* Y

What did Milton Friedman mean by saying that "inflation is always and everywhere a monetary phenomenon"?

In which direction does a surge of inflation redistribute wealth?

Your firm expands its output in a time when demand appears to be increasing. Demand for all goods is increasing because of inflation, and consumers want to buy all goods faster because their real purchasing power is falling due to inflation. This situation could indicate that your firm experienced

Based on the weight of the consumer price index CPI), the price of rental housing increases by 15 percent and that of owned housing by 5 percent. During the same year, the price of gasoline falls by 22 percent. We can say that

The drop in the buying power of an ounce of gold in sixteenth-century Europe was due to

In Felixania, cat food constitutes 45 percent of the typical basket of goods for a typical consumer, dog food constitutes 3 percent, and all other goods constitute the remaining 52 percent. Assume the price of cat food rises by 4 percent, the price of dog food falls by 10 percent, and prices remain constant for all other goods. Based on the information given, we can definitely say

To convert a current price of a product to its price in the past, we would take the current price of a product and

Arguably, the increases in housing prices in 2005-2006 caused

Define "inflation." Be specific. Be sure to address whether the prices of all goods are increasing, what is included in determining the basis for changes in the price level, and how the price level is measured.

Typically, the largest percentage category in the consumer price index CPI) is

Explain how to convert a price in an earlier time into the equivalent price in today's dollars. Give a worked example and interpret the result.

The Bureau of Labor Statistics releases consumer price index CPI) data

Michael Chang buys only tennis rackets during a particular year. During the year in question, the price of all goods rises by 10 percent on average, but the price of tennis rackets remains the same. Which statement is correct?

Refer to the following figure when answering the next questions: -According to the figure, deflation was occurring

If the value of the consumer price index CPI) in 2013 was 135 and the value of the CPI in 2012 was 117, we could correctly say that the