Please answer the questions 17) 16) The table below shows the price index for China starting in 2000.Year2000Price Index100.02001100.73200299.95101.1220032004105.062005106.952006108.52The inflation rate between 2004 and 2005 wasA) 3.9 percentB) 2.8 percentC) 1.8 percentD) 0.7 percent.17) Price indexes can overstate inflation because theyA) omit some quality improvements.B) do not contain the prices of any used goods.C) do not contain the prices of foreign goods.D) do not contain the prices of services.

17. Price index: - it is the measure of change in the price level, it measures the change in the…

17) Price indexes can overstate inflation because they A) omit some quality improvements. B) do not contain the prices of any used goods. C) do not contain the prices of foreign goods. D) do not contain the prices of services.

17) Price indexes can overstate inflation because they A) omit some quality improvements. B) do not contain the prices of any used goods. C) do not contain the prices of foreign goods. D) do not contain the prices of services.

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter6: Tracking The U.s. Economy

Section: Chapter Questions

Problem 4.9P

See similar textbooks

Related questions

Q: Consumer Price Index Year Index 2XXX 66.0 3XXX 64.6 4XXX 64.6 5XXX 65.3 6XXX 66.4 7XXX…

A: Given: Consumer Price Index Year Index 2XXX 66.0 3XXX 64.6 4XXX 64.6 5XXX 65.3…

Q: Inflation is measured as A. CPIt cmopared to CPIbase B. (CPI2-CPI1)/CPI1 x 100…

A: CPI is measured using fixed basket of goods.

Q: The basket of goods and services included in the Consumer Price Index cost $450 in the base year. If…

A: Consumer price index measures changes in the price level of a weighted average market basket of…

Q: In computing the consumer price index (CPI), a base year is chosen. Which of the following…

A: The Consumer Price Index measures the overall change in consumer prices over time based on a…

Q: The Consumer Price Index (CPI) increased from 300 to 400 over 15 years. What was the annual…

A: Here, it is given that the consumer price index changes over time and become 300 to 400 in last 15…

Q: five quarters of 1974-1975. Annual Percent Change Nominal GDP Annual Percent Change Real GDP…

A: Inflation happens when prices rise, lowering the purchasing power of your dollar. Inflation is…

Q: The amount of U.S. currency in circulation in 2014 was approximately $1,200 billion. The inflation…

A: There is a seigniorage if a $10 bill or a quarter coin has a face value of $1 yet costs $1 to…

Q: If the Consumer Price Index was 155 in one year and 165 in the next year, then the rate of inflation…

A: Inflation refers to an increase in the prices of all the goods and services produced in an economy…

Q: Price Quantity Price Quantity Car $100 400…

A: P2015 Q2015 P2017 Q2017 P2018 Q2018 Car 100 400 130 420 150 450 Rice 25 2000 30 2005 32 2100…

Q: The nominal interest rate is 12%. The inflation rate is 3%. The real interest rate is equal to %.

A: The interest rate is calculated as a percentage of the principal, or the amount borrowed, which a…

Q: Using the following information, calculate the inflation rate Year Price Quantity Price Quantity…

A: CPI index = (current price value of basket/price value of basket in the base year) x100

Q: Assume that the retail price index (RPI) for the UK was 100 in January 1950 and 3246 in January…

A: Macroeconomics is a part of economics that deals with production, decision and allocation concerning…

Q: If the CPI in period 1 is 180 and the CPI in period 2 is 240, then the rate of inflation between…

A: CPI in period 1=180 CPI in period 2=240

Q: units produced 2007 2008 2009 2010 blueberries 8…

A: Given information:-…

Q: According to the college board the average in state tuition and fees for public four year colleges…

A: The percentage change in the indicator is relative change. The display of an absolute change in…

Q: If the CPI increased from 80 to 84, the rate of inflation is: Group of answer choices 4.7% 10% 4% 5%

A: CPI: It is used as a measure of the aggregate price level in an economy.

Q: The consumer price index was 158.6 in 1999 and 166.2 in 2000. Therefore, the rate of inflation in…

A: The inflation is the rise in the aggregate price level. The inflation would result in a rise in the…

Q: 'UK inflation remained unchanged at 2.8 per cent for the second month in a row, according to…

A: The inflation rate remained unchanged during the second month in a row at 2.8% There is a…

Q: On what condition Gross Domestic Product (GDP) equals Gross National Product (GNP): Select one…

A: GDP (Gross Domestic Product) measures the value of goods and services produced within the domestic…

Q: If the CPI was 106 in 2013 and 116 in 2014, the inflation rate in 2014 was:

A: CPI refers to the Consumer Price Index. It is a statistical measure of determining variation in…

Q: The table below lists annual consumer price index and inflation rates for a country over the period…

A: Formula of inflation rate:- Inflation rate=CPIx+1-CPIxCPIx

Q: The consumer price index (CPI) of a country was approximately 200 at the beginning of year 2010. If…

A: Given information: CPI was 200 at the beginning of year 2010. Inflation continued at an average of…

Q: Suppose your annual 2001 salary was $40,000 and your 2006 salary was $52,000. Assume the annual CPI…

A: The value of a currency expressed in terms of goods and services that one unit of money can buy is…

Q: The average price of tuition and fees at public 4-year colleges and universities increased from…

A: According to the question, that average change in tuition and fee became $7100 in 2010 from $1780 in…

Q: If the Consumer Price Index was 107 in one year and 104 in the following year, then the rate of…

A: Inflation is the abnormal increase in the price level of the goods and services of the economy over…

Q: Calculate the inflation rate from 2016 to 2017 if the index number in 2016 was 125 and increased to…

A: Given Price Index in 2016 = 125 Price Index in 2017 = 128

Q: If inflation is 8% and the price of oil has increased by only 5%, then the relative price of oil: A)…

A: Inflation can be defined as a continuous and sustained increase in the general price level.

Q: Explain how the Consumer Price Index (CPI) is calculated and critically evaluate its merits as a…

A: Inflation reflects how the general price level has moved during the given year. It is determined by…

Q: (Year 1) (Year 2) Restaurant Visits 5 units $20 Each 50 units $35 Each N 95 Masks 250…

A: Inflation refers to the increase in general price levels in an economy from one period to another.…

Q: The value of a price index in the base year is 0 100 200 The inflation rate The average cost of…

A: the price index refers to a normalized average of price relatives for a given class of products or…

Q: The CPI in year 1 is 125, in year 2 is 130, and in year 3 is 135. What is the inflation rate in each…

A: The rate at which prices grow over a specific time period is known as inflation. Inflation is…

Q: If the annual inflation rate in an economy is i, then $1 borrowed at the beginning of a year will…

A: Inflation rate refers to increase in average price level of goods and services produced in the…

Q: According to the government data, the CORE rate of inflation (based on the CPI) during the one-year…

A: The ‘core inflation is the change in the cost of goods and services but does not include people in…

Q: Suppose the CPI base 100 - 2002 in 2013 is equal to 122.2. What is the average annual inflation rate…

A: CPI: It refers to the economic tool under so that inflation rate can be classified in the economy.…

Q: The CPI for 2015 is computed as 100 times the ratio of the price of the market basket in 2015…

A: The statement is FALSE

Q: If the price index in year 1 is 146 and in year 2 is 163, the rate of inflation between year 1 and…

A: Inflation refers to the increase the price level of the goods and services in the economy which…

Q: Considering 2010 as the base year, calculate inflation rate for each year (2011-2019) and fill the…

A: Given; Years CPI 2010 100 2011 111.92 2012 122.75 2013 132.19 2014 141.70 2015 145.28…

Q: f the Consumer Price Index was 155 in one year and 165 in the next year, then the rate of inflation…

A: Consumer Price Index measures the change in the price of a fixed basket bought by a typical consumer…

Q: 170 in a year to 180 in the following year, the rate of inflation during that year was: Group of…

A: CPI is measured using fixed basket of goods.

Question

Please answer the questions 17)

16) The table below shows the price index for China starting in 2000.
Year
2000
Price Index
100.0
2001
100.73
2002
99.95
101.12
2003
2004
105.06
2005
106.95
2006
108.52
The inflation rate between 2004 and 2005 was
A) 3.9 percent
B) 2.8 percent
C) 1.8 percent
D) 0.7 percent.
17) Price indexes can overstate inflation because they
A) omit some quality improvements.
B) do not contain the prices of any used goods.
C) do not contain the prices of foreign goods.
D) do not contain the prices of services.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Using the above data, what is the unemployment rate? These data are U.S. statistics from 2010. How does it compare to the February 2015 unemployment rate computed earlier?
Assess whether the following would be counted as unemployed in the Current Employment Statistics survey. A husband willingly stays home with children while his wife works. A manufacturing worker whose factory just closed down. A college student doing an unpaid summer internship. A retiree. Someone who has been out of work for two years but keeps looking for a job. Someone who has been out of work for two months but isnt looking for a job. Someone who hates her present job and is actively looking for another one. Someone who decides to take a part time job because she could not find a full time position.
The index number representing the price level changes from 110 to 115 in one year and then from 115 to 120 the next year. Since the index number increases by five each year, is five inflation rate each year? Is the inflation rate the same each year? Explain your answer.
If inflation rises unexpectedly by 5, indicate for each of the following whether the economic actor is helped, hurt, or unaffected: A union member with a COLA wage contract Someone with a large stash of cash in a safe deposit box A bank lending money at a fixed rate of interest A person who is not due to receive a pay raise for another 11 months
If you an? out of school but working part time, are you considered employed or unemployed in U.S. labor statistics? If you are a full time student and working 12 hours a week at the college cafeteria are you considered employed or not in the labor force? If you are a senior citizen who is collecting social security and a pension and working as a greater at Wal-Mart are you considered employed or not in the labor force?
The total price of purchasing a basket of goods in the United Kingdom over four years is: year 1=940, year 2=970, year 3=1000, and year 4=1070. Calculate two price indices, one using year 1 as the base year (set equal to 100) and the other using year 4 as the base year (set equal to 100). Then, calculate the inflation rate based on the first price index. If you had used the other price index, would you get a different inflation rate? If you are unsure, do the calculation and find out.