In an imaginary economy, consumers buy only sandwiches and hamburgers. The typical consumer consumes 10 sandwiches and 6 hamburgers. A sandwich cost $3 in 2020 and $5.40 in 2021. A hamburger cost $5 in 2020 and $6 in 2021. Which of the following statements is correct? O When 2007 is chosen as the base year, the inflation rate is 50 percent in 2007 O When 2006 is chosen as the base year, the consumer price index is 90 in 2007. O When 2006 is chosen as the base year, the inflation rate is 150 percent in 2007. O When 2006 is chosen as the base year, the inflation rate is 5 percent in 2007 When 2007 is chosen as the base year, the consumer price index is 100 in 2006.
In an imaginary economy, consumers buy only sandwiches and hamburgers. The typical consumer consumes 10 sandwiches and 6 hamburgers. A sandwich cost $3 in 2020 and $5.40 in 2021. A hamburger cost $5 in 2020 and $6 in 2021. Which of the following statements is correct? O When 2007 is chosen as the base year, the inflation rate is 50 percent in 2007 O When 2006 is chosen as the base year, the consumer price index is 90 in 2007. O When 2006 is chosen as the base year, the inflation rate is 150 percent in 2007. O When 2006 is chosen as the base year, the inflation rate is 5 percent in 2007 When 2007 is chosen as the base year, the consumer price index is 100 in 2006.
Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations
Section: Chapter Questions
Problem 18P
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Transcribed Image Text:In an imaginary economy, consumers buy only sandwiches and hamburgers. The typical consumer consumes 10 sandwiches and 6 hamburgers. A
sandwich cost $3 in 2020 and $5.40 in 2021. A hamburger cost $5 in 2020 and $6 in 2021. Which of the following statements is correct?
O When 2007 is chosen as the base year, the inflation rate is 50 percent in 2007
When 2006 is chosen as the base year, the consumer price index is 90 in 2007.
When 2006 is chosen as the base year, the inflation rate is 150 percent in 2007.
When 2006 is chosen as the base year, the inflation rate is 5 percent in 2007
When 2007 is chosen as the base year, the consumer price index is 100 in 2006.
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