EBK STUDY GUIDE FOR MANKIW'S BRIEF PRIN
7th Edition
ISBN: 8220103455329
Author: Mankiw
Publisher: CENGAGE L
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Chapter 6, Problem 1QR
To determine
Effect on
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Which do you think has a greater effect on the CPI:a 10 percent increase in the price of chicken or a10 percent increase in the price of caviar? Why?
Over a long period of time, the price of a candybar rose from $0.20 to $1.20. Over the same period,the CPI rose from 150 to 300. Adjusted for overallinflation, how much did the price of the candy barchange?
Over a long period of time the CPI rose from 100 to 150. What does a CPI of 150 mean? If the price of imported vegetables rises, between the CPI and the GDP deflator, which one of the two will be affected more? Explain.
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EBK STUDY GUIDE FOR MANKIW'S BRIEF PRIN
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- Does an increase in the price of imported Belgian chocolate affect the CPI or the GDP deflator more? Whyarrow_forwardUse your CPI Chart to calculate the numbers 2-4. 2. If you made $38,000 in 1997, how much money would you have to make in 2006 to maintain your real income? Explain.arrow_forwardDoes an increase in the price of imported Frenchwine affect the CPI or the GDP deflator more? Why?arrow_forward
- Describe the three problems that make the CPI animperfect measure of the cost of living.arrow_forwardIn a simple economy, people consume only two goods: food and clothing. The market basket of goods used to compute the CPI has 50 units of food and 10 units of clothing. Food Clothing Last year's price $4 $8 This year's price $6 $16 a. What are the percentage increases in the price of food and in the price of clothing? b. What is the percentage increase in the CPI? c. Do these price changes affect all consumers to the same extent? Explainarrow_forwardThe table shows the quantities of the goods Suzie bought and the prices she paid during two consecutive weeks. Suzie's CPI market basket contains the goods she bought in Week 1. Calculate the cost of Suzie's CPI market basket in Week 1 and in Week 2. What percentage of the CPI market basket is gasoline? Calculate the value of Suzie's CPI in Week 2 and her inflation rate in week 2. The cost of her CPI market basket in Week 2 is $ 95.75. >>> Answer to 2 decimal places. Gasoline is 36.3 percent of the CPI market basket. >>> Answer to 1 decimal place. Week 1 Item The cost of Suzie's CPI market basket in Week 1 is $ 103.25. >>> Answer to 2 decimal places. The value of Suzie's CPI in Week 2 is >>> Answer to 1 decimal place. Coffee Books Gasoline Week 2 Item Coffee Books Gasoline Concert Quantity 13 cups 1 15 gallons Quantity 13 cups 2 5 gallons 1 ticket Price $2.75 a cup $30.00 each $2.50 a gallon Price $2.75 a cup $15.00 each $3.00 a gallon $95 eacharrow_forward
- What is CPI? Define it and discuss why it is important.arrow_forwardWhat is the relationship between GDP, inflation, and CPI?arrow_forwardThe tables show the quantities of the goods that Harry bought and the prices he paid during two consecutive weeks. Harry's CPI market basket contains the goods he bought in Week 1. Calculate Harry's CPI in Week 2. What was his inflation rate in Week 2? Harry's CPI in Week 2 is >>> Answer to 1 decimal place. Week 1 Item Coffee iTunes songs Gasoline Week 2 Item Coffee iTunes songs Gasoline Quantity 5 cups 5 10 gallons Quantity 4 cups 10 10 gallons Price (per unit) $3.00 $1.00 $2.00 Price (per unit) $3.25 $1.00 $3.00arrow_forward
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