(b) “Like the CPI, the GDP deflator is subject to substitution bias.” True or false? Explain. (c) “Unmeasured quality change generally causes the CPI to overstate the actual increases in the cost of living.” True or false? Explain. (d) In compiling data for the CPI, the Bureau of Labor Statistics makes no attempt to adjust the data to reflect quality changes.” True or false? Explain.

(b) “Like the CPI, the GDP deflator is subject to substitution bias.” True or false? Explain. (c) “Unmeasured quality change generally causes the CPI to overstate the actual increases in the cost of living.” True or false? Explain. (d) In compiling data for the CPI, the Bureau of Labor Statistics makes no attempt to adjust the data to reflect quality changes.” True or false? Explain.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter17: Inflation

Section: Chapter Questions

Problem 4SQ

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urgent , no plagiarism The following statements refer to the CPI and the GDP deflator. Which one is CORRECT? The CPI rises when the price of intermediate goods purchased by firms increases. The inflation rate calculated using the CPI is always higher than that obtained with the GDP deflator. The CPI takes into account the prices of all goods and services produced in an economy. The GDP deflator does not reflect the rise in prices on imported final goods
Which of the following statements is correct? a. The CPI can be used to compare dollar figures from different points in time. b. The percentage change in the CPI is a measure of the inflation rate, but the percentage change in the GDP deflator is not a measure of the inflation rate. c. Compared to the consumer price index (CPI), the GDP deflator is the more common gauge of inflation. d. The GDP deflator better reflects the goods and services bought by consumers than does the CPI.
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A certain country calculates inflation using a consumer price index (CPI). Between 2016 and 2017 the CPI increased from 200 to 220. What was the inflation rate between 2016 and 2017? 110% 10% 20 20%
1995 costs. With labor data from a country for selected years from 1995 and projected to 2050, the rate of change of the CPI can be modeled by dC dt = 0.009t2 − 0.096t + 4.85 dollars per year, where t = 0 represents 1990. (a) Find the function that models C(t), if the CPI was 155 in 2010. (Enter exact numerical values. Do not round.)
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The consumer price index (CPI) is a fixed-weight index. It compares the price of a fixed bundle of goods in one year with the price of the same bundle of goods in some base year. Calculate the price index of a bundle containing 100 units of good X, 150 units of good Y, and 25 units of good Z in 2018, 2019, and 2020. Calculate the percentage change in index between 2018 and 2019 and again between 2019 and 2020. What is rate of inflation/deflation between 2019 and 2020? GOOD QUANTITY CONSUMED 2018 PRICES 2019 PRICES 2020 PRICES X 100 Rs. 10.00 Rs.10.50 Rs. 10.75 Y 150 Rs. 10.50 Rs. 20.00 Rs. 20.00 Z 25 Rs. 30.00 Rs. 30.25 Rs. 30.00 In each case of following cases, does the increase in prices affect CPI, GDP deflator, or both in Pakistan? Analyze and Justify your answer. (Maximum 150 words) The price of imported Belgian chocolate has increased. The price of imported equipment used in industrial level ice-cream production has…
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In 1974, one could buy a theater for $1.25. Today the same theater ticket costs $6.50. Which pair of CPIs would imply that the cost in today's dollars was the same for both tickets? Please explain. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
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