Macroeconomics
13th Edition
ISBN: 9781337617444
Author: Roger A. Arnold
Publisher: Cengage
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Chapter 6, Problem 12QP
To determine
The change in
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KKTV 11 News wants to interview you, a leading economics expert in Colorado Springs, to learn why it is found that the price of roses increases by more than the price of greeting cards on Valentine's Day. What is your explanation
Suppose housing constitutes 45% of the typical basket of goods for a typical consumer, education constitutes 3%, and all other goods make up the remaining 52%. Assume the price of housing rises by 4%, the price of education falls by 10%, and prices remain constant for all other goods. Based on the information given, we can definitely say
Select one:
a.because the price of education fell by more than the price of housing rose, the consumer price index (CPI) must have decreased.
b.the CPI is higher than in the previous year.
c.if consumers get a 4% pay raise, they are worse off in terms of their real income compared to inflation as measured the CPI.
d.because housing is a luxury (as is education), consumers are certainly no worse off in terms of their real wages as measured by the CPI.
e.the CPI is unchanged from the previous year.
What do price level changes affect when dealing with demand and supply curves?
Chapter 6 Solutions
Macroeconomics
Ch. 6.1 - Prob. 1STCh. 6.1 - Prob. 2STCh. 6.1 - In year 1, your annual income is 45,000 and the...Ch. 6.2 - Prob. 1STCh. 6.2 - Prob. 2STCh. 6 - Prob. 1QPCh. 6 - Prob. 2QPCh. 6 - Prob. 3QPCh. 6 - Prob. 4QPCh. 6 - Prob. 5QP
Ch. 6 - Prob. 6QPCh. 6 - Prob. 7QPCh. 6 - Prob. 8QPCh. 6 - Prob. 9QPCh. 6 - Prob. 10QPCh. 6 - Prob. 11QPCh. 6 - Prob. 12QPCh. 6 - Prob. 13QPCh. 6 - Prob. 14QPCh. 6 - Prob. 1WNGCh. 6 - Prob. 2WNGCh. 6 - Prob. 3WNGCh. 6 - Prob. 4WNGCh. 6 - Prob. 5WNGCh. 6 - Prob. 6WNGCh. 6 - Prob. 7WNGCh. 6 - Prob. 8WNGCh. 6 - Prob. 9WNGCh. 6 - Prob. 10WNG
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