Exam 11: Measuring the Cost of Living: Correcting Economic Variables for the Effects of Inflation

Scenario 24-4 Quinn has job offers in Wrexington and across the country in Charlieville.The Wrexington job would pay a salary of $50,000 per year,and the Charlieville job would pay a salary of $40,000 per year.The CPI in Wrexington is 150,and the CPI in Charlieville is 90. -Refer to Scenario 24-4.If Quinn only cares about maximizing her purchasing power,then she should

Jake loaned Elwood $5,000 for one year at a nominal interest rate of 10 percent.After Elwood repaid the loan in full,Jake complained that he could buy 4 percent fewer goods with the money Elwood gave him than he could before he loaned Elwood the $5,000.From this,we can conclude that the rate of inflation during the year was

In the United States in the late 1970s,nominal interest rates were high and inflation rates were very high.As a result,real interest rates were

In 1972,one could buy model rocket engines for $1.50 each.If those same engines cost $2.50 each today,then which pair of CPIs would make the engine prices in today's dollars the same for both years?

Which of the following is not correct?

When box office receipts are not corrected for inflation,

Scenario 24-1 The price tag on a tennis ball in 1975 read $0.10,and the price tag on a tennis ball in 2005 read $1.00.The CPI in 1975 was 52.3,and the CPI in 2005 was 191.3. -Refer to Scenario 24-1.The price of a 1975 tennis ball in 2005 dollars is

In 1931,President Herbert Hoover was paid a salary of $75,000.Government statistics show a consumer price index of 15.2 for 1931 and 237 for 2015.President Hoover's 1931 salary was equivalent to a 2015 salary of about

Iggie took a university teaching job as an assistant professor in 1980 at a salary of $15,000.By 2011,she had been promoted to full professor,with a salary of $70,000.If the price index was 82 in 1980 and 225 in 2011,then what is Iggie's 2011 salary in 1980 dollars?

The consumer price index was 200 in 2012 and 208 in 2013.The nominal interest rate during this period was 9 percent.What was the real interest rate during this period?

If the CPI was 95 in 1955 and is 475 today,then $100 today purchases the same amount of goods and services as

In the United States,real interest rates were

Which of the following is not correct?

When looking at a graph of nominal and real interest rates you notice that nominal rates always lie above real rates.From this you conclude

If the nominal interest rate is 8 percent and the rate of inflation is 3 percent,then the real interest rate is

Babe Ruth's 1931 salary was $80,000.Government statistics show a consumer price index of 15.2 for 1931 and 237 for 2015.Ruth's 1931 salary was equivalent to a 2015 salary of about

The CPI was 220 in 2012 and 231 in 2013.Phil borrowed money in 2012 and repaid the loan in 2013.If the nominal interest rate on the loan was 10 percent,then the real interest rate was

Which of the following statements about real and nominal interest rates is correct?

Scenario 24-1 The price tag on a tennis ball in 1975 read $0.10,and the price tag on a tennis ball in 2005 read $1.00.The CPI in 1975 was 52.3,and the CPI in 2005 was 191.3. -Refer to Scenario 24-1.In 1975 dollars,a 1975 tennis ball cost $0.10 and a 2005 tennis ball cost

When ranking movies by nominal box office receipts,what important fact is overlooked?