MindTap Economics, 1 Term (6 Months) Printed Access Card for Mceachern's ECON MACRO, 6th
6th Edition
ISBN: 9781337915595
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 6, Problem 9P
To determine
(a)
To determine
(b)
CPI in base year and annual rate of consumer price inflation in 2017.
To determine
(c)
CPI in base year and annual rate of consumer price inflation in 2017.
To determine
(d)
CPI in base year and the annual rate of consumer price inflation in 2017.
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For the next question assume that consumers in an economy only purchase two products,
tablets and sushi. The following table provides the quantities purchased in the base year, 2007,
and prices in 2007 and 2018.
Base Year Price
Product
Quantity
(2007)
2018 Price
Tablets
10
25
50
Sushi
40
10
15
You learn next year (2019) that the CPI is 175. What is the inflation rate between 2018 and 2019?
Base Year Price
Product
Quantity
(2007)
2018 Price
Tablets
10
25
50
Sushi
40
10
15
Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.
a
6.7%
b
9.1%
3.4%
d
5.2%
Table 1 shows a consumer price index for the years 2013-2018, with 2015 = 100.
Table 1
Year
CPI
2013
97.8
2014
98.6
2015
100
2016
102.5
2017
104.1
a. Calculate CPI inflation rates for each year from 2014 to 2018.
2018
104.9
1. When 1983 is the CPI base year, the CPI value is 82.4 for 1980 and 172.2 for 2000. Suppose we want to convert this CPI series to have a base year of 2000 (that is, CPI2000 = 100). What is the value of the revised CPI for 1980?
Chapter 6 Solutions
MindTap Economics, 1 Term (6 Months) Printed Access Card for Mceachern's ECON MACRO, 6th
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- In 1917, US Senators received a nominal salary of $7,500, and the CPI was 17.3. In 2017, US Senators received a nominal salary of $174,000, and the CPI was 245.1. (a) Fill in the blanks in the following table with the values of US Senators' 1917 salary in terms of 2017 dollars (bottom-left cell) and of US Senators' 2017 salary in terms of 1917 dollars (top-right cell). Round to the nearest whole dollar when necessary. Units Senators' 1917 Salary Senators' 2017 Salary 1917 Dollars 7,500 Number 2017 Dollars Number (b) The purchasing power of US Senators' salaries 174,000 Click for List from 1917 to 2017.arrow_forward9:58 ◄ Safari READ ONLY - This is an older file format. To make changes,... more 1. Please calculate CPI for every PERIOD and Explain (a) Base Period Item Macaroni & Cheese Orange Juice (b) Period 2 Item Macaroni & Cheese Orange Juice 2. Please calculate Year 2016 2017 2018 Real GDP (2009 $) 1,282 1,307 1,288 Price Amount $3.00 4 $1.50 2 Price Amount $3.10 4 $1.65 2 Consumer price index (2009=100) 109.1 111.9 138.9 Labour force (000) 17.593 17.857 18.125 Audio Device Connected Tap to start Read Aloud Upgrade a copy Cost $12.00 $3.00 Cost $12.40 $3.30 Employment (000) 16.537 16.696 16.856 (a) What was the rate of growth of real GDP from 2016 to 2017, and 2017 to 2018? (b) What was the rate of inflation in 2017 and in 2018? (c) What were the rates of growth of the labour force and employment from 2016 to 2017, and 2017 to 2018? (d) What happened to the unemployment rate between 2016 and 2017, and between 2017 and 2018? 28 Xarrow_forwardShows the fruit prices that the typical college student purchased from 2001 to 2004. What is the amount spent each year on the “basket” of fruit with the quantities shown in column 2? 2. Construct the price index for a “fruit basket” in each year using 2003 as the base year. 3. Compute the inflation rate for fruit prices from 2001 to 2004.arrow_forward
- 57arrow_forward4. In a simple economy, people consume only 2 goods, food and clothing. The market basket of goods used to compute the CPI consists of 50 units of food and 10 units of clothing. Food Clothing 2021 price per unit $4 $10 2022 price per unit $6 $20 (1) What is the cost of basket in each year? (2) Compute CPI in each year using 2021 as base year.arrow_forwardThe CPI is used to measure the cost of a typical basket of goods. The typical household in the nation of Jaskson buys 4 loaves of bread, 3 pounds of cream cheese, and 8 books each week. The prices of these goods in years 2015-2017 are given the table below: Price of a Year loaf of bread 2015 $1 2016 $2 2017 $3 Price of a lb of cream cheese $3 $6 $6 Price of a book $10 $20 $25 • Calculate the CPI in 2015, using 2016 as the base year. (Enter your answer as an Integer)arrow_forward
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