Exam 8: The Price Level and Inflation

Refer to the following figure when answering the next questions: -In the figure, which of the following changes in the consumer price index CPI) of Brazil would most closely reflect what is depicted during the 2003-2004 time period?

Milton Friedman, who won the Nobel Prize in Economics, characterized inflation as being "high and variable." These characteristics of inflation create problems because

What is the Billion Prices Project? Explain the motivation behind it and its limitations.

The value of the consumer price index CPI) in 2011 was 229 compared to the base period's, which will always have the value of

You are offered two jobs, one in Chicago paying $67,000 and one in Philadelphia paying $79,000. The price index in Chicago is 110.8, and in Philadelphia it is 126.5. If real wages are the only consideration, then

In what two ways does the consumer price index CPI) overestimate the rate of inflation?

Medical care typically composes ______of the typical consumer price index (CPI).

Refer to the following figure to answer the next four questions: -As presented in the figure, one could correctly state that during the period shown

The ratio Price Level in Earlier Time) / Price Level Today) would be used to

What is one reason why a government will deliberately inflate its national money supply?

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.

Why would knowing the cost of living index be important in real life? Hint: Consider the following scenario. You get two job offers: one in San Francisco paying $80,000 per year and the other in Dallas paying $68,000 per year.)

Suppose a basket of goods and services has been selected to calculate the consumer price index CPI) and 2002 has been selected as the base year. In 2002, the basket's cost was $600; in 2004, the basket's cost was $650; and in 2006, the basket's cost was $700. The value of the CPI in 2004 was rounded to one decimal place)

In Las Vegas, the cost of living index is 110, and in San Francisco, it is 170. You work in Las Vegas currently and your salary is $57,000. You are offered a promotion and pay raise of $70,000 to move to San Francisco. If you take the promotion

Consider a nation in which the price index was 150 last year and this year it is 130. Which statement is correct?

If 51 percent of all goods in the consumer price index CPI) became more expensive and 49 percent became cheaper

In Bovania, cattle compose 48 percent of the consumer price index CPI), housing composes 32 percent, and entertainment accounts for the remaining 20 percent. If, in a certain year, the price of cattle rises by 30 percent and the price of housing rises by 25 percent, then

Typically if real wages fall, the quantity demanded of labor rises. If workers agree to 3 percent wage increases for a four-year period and inflation is more than 3 percent, then, based on this information alone,

In terms of inflation, the period from the mid-1980s until today in the United States is called the "Great Moderation." This refers to the fact that

Wanda owns a store and has not had to raise prices recently-and now her store has more customers. Which statement is correct?