A small nation of 10 people idolizes the TV show The Voice. All they produce and consume are karaoke machines and CDs, in the following amounts: Karaoke Machines CDs Quantity Price Quantity Price (Dollars) (Dollars) 2020 10 40 30 10 2021 12 60 50 12 Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is . (Note: Use 2020 as the base year, and fix the basket at 1 karaoke machine and 3 CDs.) Using a method similar to that used to calculate the GDP deflator, the percentage change of the overall price level is . (Note: Again, use 2020 as the base year.) Which of the following statements is correct? 1.The GDP deflator holds the basket of goods and services constant. 2.The inflation rate in 2021 is not the same using the two methods. 3. The CPI allows the basket of goods and services to change.
A small nation of 10 people idolizes the TV show The Voice. All they produce and consume are karaoke machines and CDs, in the following amounts: Karaoke Machines CDs Quantity Price Quantity Price (Dollars) (Dollars) 2020 10 40 30 10 2021 12 60 50 12 Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is . (Note: Use 2020 as the base year, and fix the basket at 1 karaoke machine and 3 CDs.) Using a method similar to that used to calculate the GDP deflator, the percentage change of the overall price level is . (Note: Again, use 2020 as the base year.) Which of the following statements is correct? 1.The GDP deflator holds the basket of goods and services constant. 2.The inflation rate in 2021 is not the same using the two methods. 3. The CPI allows the basket of goods and services to change.
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter7: Taking The Nation's Economic Pulse
Section: Chapter Questions
Problem 14CQ
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Question
A small nation of 10 people idolizes the TV show The Voice. All they produce and consume are karaoke machines and CDs, in the following amounts:
|
|
Karaoke Machines
|
CDs
|
||
|---|---|---|---|---|
|
Quantity
|
|
Quantity
|
Price
|
|
|
(Dollars)
|
(Dollars)
|
|||
| 2020 | 10 | 40 | 30 | 10 |
| 2021 | 12 | 60 | 50 | 12 |
Using a method similar to that used to calculate the consumer price index , the percentage change in the overall price level is . (Note: Use 2020 as the base year, and fix the basket at 1 karaoke machine and 3 CDs.)
Using a method similar to that used to calculate the GDP deflator, the percentage change of the overall price level is . (Note: Again, use 2020 as the base year.)
Which of the following statements is correct?
1.The GDP deflator holds the basket of goods and services constant.
2.The inflation rate in 2021 is not the same using the two methods.
3. The CPI allows the basket of goods and services to change.
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