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 2 karaoke machines and 6 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? Check all that apply. The CPI allows the basket of goods and services to change. The GDP deflator allows the basket of goods and services to change. The inflation rate in 2021 is not the same using the two methods.
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 | 20 | 50 | 60 | 5 |
| 2021 | 21 | 70 | 80 | 6 |
Using a method similar to that used to calculate the
Using a method similar to that used to calculate the
Which of the following statements is correct? Check all that apply.
The CPI allows the basket of goods and services to change.
The GDP deflator allows the basket of goods and services to change.
The inflation rate in 2021 is not the same using the two methods.
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