No answer from Chat GPT will downvote. Why should CPI weights be updated? (Select all that apply.)O a. Better reflect current household expenditure patternsb. Facilitate introduction of new goodsc. Rotate households from the household budget surveyd. Facilitate introduction of new outletse. Implement improved index compilation methods

Explanation for each point (brief):a. Better reflect current household expenditure patterns:As…

Answered: Why should CPI weights be updated?…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter22: Inflation

Section: Chapter Questions

Problem 26CTQ: Describe a situation, either a government policy situation, an economic problem, or a private sector...

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How to Measure Changes in the Cost of Living introduced a number of different price indices. Which price index would be best to use to adjust your paycheck for inflation?
Describe a situation, either a government policy situation, an economic problem, or a private sector situation, where using the CPI to convert from nominal to real would be more appropriate man using the GDP deflate:
2. Which of the problems in the construction of the CPI might be illustrated by each of the followingsituations? Explain.a. the invention of cell phonesb. the introduction of air bags in carsc. increased personal computer purchases in response to a decline in their priced. more chips in each package of potato chipse. greater use of fuel-efficient cars after gasoline prices increase
Which of the following was a way for the b ureauof labor statistics to reduce the qualitty/new good bias in its calcualtion of the cpi? a) automatically reduce the inflation by 0.5% to account for quality?new good bias. b)allow for some substitution amongst products. c) remove energy and food prices. d) update the list of products included in the cpi more often and rapidly.
Indicate which one of the following events will affect CPI ONLY. Oa Saudi Arabia successfully developing a vaccine for Covid-19 which is used locally as well as exported to other countries. Ob. There is a decrease in the price of meat imported from Australia. Oc.There is an increase in the price of eggs produced in Saudi Arabia Od. People buying more imported goods without any change in prices O Saudi Arabia changes its base year to 2020
(Please 2 answer s) Question 27 : Consider tablets which are used by a majority of consumers. Suppose that due to the development of 5G technology, tablets underwent a major advance from 2020 to 2021 in terms of the number of functions they could do. The tablets in 2021 sold at the same price as those in 2020. Which of the following would tend to increase in 2021 as a result of this major advance? Select only one : O CPI O Purchasing power of money O GDP deflator O None of the above Question 28 : Suppose a country enters a major recession where the number of unemployed increases a lot and the wages of jobs fall a lot. Assuming no other major changes, what would be the effect of this change on a country's CPI? Select only one : O Increase O Decrease O Stays the same O Unclear
Calculate a new consumer price index for the data in the following exhibit. Assume that current-year prices of Twinkies, fuel oil, and internet are $0.95/package, $1.25/gallon, and $15.00/month, respectively. Calculate the current year’s cost of the market basket and the value of the current year’s price index. What is this year’s percentage change in the price level compared to the base year? Product (1) Quantity in Market Basket (2) Prices in Base Year Twinkies 365 packages $ 0.89/package Fuel oil 500 gallons 1.00/gallon Internet 12 months 30.00/month
The BBS reported the following CPI data:June 2016- 201.9 June 2017- 207.2 June 2018- 217.4 d) How do alternative price indexes help to avoid the bias in the CPI numbers? (Hint: GDPdeflator, PPI are some of the prominent alternative price indexed).e) Give example of the pros and cons of each index including CPI?
Consider an economy where the consumers buy widgets, cogs, and services. The CPI market basket consists of 158 widgets, 370 cogs, and 817 services. We have the following prices for 2021 and 2022: Year Widget Cost Cogs Cost Services Cost 2021 108.08 55.91 28.12 2022 143.36 65.36 32.78 If the base year is 2022, what is the price index for 2021? Round your answer to two digits after the decimal.
How does a smartphone illustrate new goods bias in the CPI? Because the 13 items that cost $3,000 in 1991 provided the same services as today's $500 smartphone, the price of these services _____. A. Has fallen from 3000 to 500 B. Might have fallen from 3000 to 500 but there is no sure way of konwing C. has fallen from 3000 to more than 500 D. Has fallen from 3000 to less than 500

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