In a simple economy, people consume only two goods: food and clothing. The market basket of goods used to compute the CPI has 40 units of food and 20 units of clothing. Food Clothing Last year's price $10 $18 This year's price $14 $21 a) What are the percentage increases in the price of food? Number b) What are the percentage increases in the price of clothing? Number c) What is the percentage increase in the CPI? Number

In a simple economy, people consume only two goods: food and clothing. The market basket of goods used to compute the CPI has 40 units of food and 20 units of clothing. Food Clothing Last year's price $10 $18 This year's price $14 $21 a) What are the percentage increases in the price of food? Number b) What are the percentage increases in the price of clothing? Number c) What is the percentage increase in the CPI? Number

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Measuring The Cost Of Living

Section: Chapter Questions

Problem 2CQQ

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1. In a simple economy, people consume only 2 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 $10 2002 Price $4 2003 Price $6 $20 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? Explain.
In 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? Explain
Tennis Balls Golf Balls Bottles of Gatorade 2020 price Rs.250 Rs.450 Rs.150 2020 quantity 100 100 200 2021 price Rs.25 Rs.653 Rs.255 2021 quantity 100 100 200 a. What is the percentage change in the price of Tennis Balls? b. What is the percentage change in the price of Golf Balls? c)What is the percentage change in the price of Bottles of Gatorade?d)Using a method similar to the CPI, compute the percentage change in the overall price level.
In a simple economy, people consume only 2 goods, food and clothing. The market basket of goods used to compute the CPI consists of 100 units of food and 20 units of clothing. (1) What are the percentage increases in the price of food and in the price of clothing? (2) What is the percentage increase in the CPI? (3) Do these price changes affect all consumers to the same extent? Explain. Food Clothing 2020 price per unit unite ¥8 Y 100 2021 price per unit Y 12e Y 200
1. In a simple economy, people consume only 2 goods, food and cloning. market basket of goods used to compute the CPI consists of 50 units of food and 10 units of clothing. Food $4 $6 Clothing $10 2002 price per unit 2003 price per unit $20 a. What are the percentage increases in the price of food and in the price of clothing? What is the percentage increase in the CPI? b. c. Do these price changes affect all consumers to the same extent? Explain.
The people on Coral Island buy only juice and cloth. The CPI basket contains the quantities bought in 2009. The average household spent $60 on juice and $30 on cloth in 2009 when the price of juice was $2 bottle and the price of cloth was $5 a yard. In the current year, 2010, juice is $4 a bottle and cloth is $6 a yard. a percentage of the household's budget spent on juice in 2009. Calculate the CPI basket and the
The market basket used to calculate the CPI in Aquilonia is 4 loaves of bread, 6 gallons of milk, 2 shirts, and 2 pairs of pants. In 2005, bread cost $1.00 per loaf, milk cost $1.50 per gallon, shirts cost $6.00 each, and pants cost $10.00 per pair. In 2006, bread cost $1.50 per loaf, milk cost $2.00 per gallon, shirts cost $7.00 each, and pants cost $12.00 per pair. Using 2005 as the base year, what was Aquilonia’s inflation rate in 2006? This question is stumping me. I thought that this answer was 124.4 but it seems that it is 24.4. I cant figure it out
The following graph shows the approximate value of the United States Consumer Price Index (CPI) from December 2006 through July 2007. I(t) CPI Dec 2006–July 2007 209 208 207 206 205 204 203 202 201 1 3 4 5 Dec-06 July-07 O The approximating curve shown on the figure is given by I(t) = -0.04t3 + 0.4t2 + 0.1t + 202 (0 sts 7), where t is time in months since the start of December 2006. I'(t) (a) Use the model to estimate the monthly inflation rate in June 2007 (t = 6). Recall that the inflation rate is I(t) (Round your answer to three decimal places.) (b) Was inflation slowing or speeding up in June 2007? O slowing down O speeding up (c) When was inflation speeding up? When was inflation slowing? Inflation was speeding up prior to one third of the way through ---Select--- 2007 and slowing down after that.
The table below shows some data I got from FRED on the CPI and PCE deflator. The PCE deflator is a price index similar to the GDP deflator but only uses the consumption ("personal consumption expenditures") part of the GDP data. Year CPI PCE deflator 1989 123.94 60.69 2001 177.04 79.74 2020 258.84 111.15 You were probably born around 2001 so calculate the annualized inflation rate based on the CPI between 2001 and 2020. Repeat to find the annualized inflation using the PCE deflator between 2001 and 2020. The gives a higher inflation rate O PCE, and its noticeably higher (over 0.5 percentage points) PCE, but its not that different from the CPI inflation rate (difference is under 0.5 percentage points) CPI, and its noticeably higher (over 0.5 percentage points) CPI, but its not that different from the CPI inflation rate (difference is under 0.5 percentage points)
Insurance and pensions 11.9% Item a. Entertainment b. Transportation c. Clothing Housing 32.8% Entertainment 5.3% Source: U.S. Bureau of Labor Statistics, Consumer Expenditure Survey (2018 data). 0.053 0.159 0.03 Transportation 15.9% Health care 8.1% Use the item weights in the figure to determine the percentage change in the CPI that would result from a(n) a. 20 percent increase in entertainment prices. b. 8 percent decrease in transportation costs. c. doubling of clothing prices. (Note: Review the table titled "Computing Changes in the CPI" in your text for assistance.) Instructions: Enter your responses as a percentage rounded to two decimal places. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Item Weight Price Change (Inflation Effect) Impact on CPI 20% -8% 100% Food 12.9% Clothing 3.0% Miscellaneous 10.1%
The following graph shows the approximate value of the U.s. Consumer Price Index (CPI) from September 2004 through November 2005. CPI Sep 2004–Nov 2005 I(t) 202 200 198 196 194 192 190 + 188 →t 14 4 8 10 12 Sep-04 Jan-05 Nov-05 The approximating curve shown on the figure is given by I(t) = -0.005t³ + 0.12t2 – 0.01t + 190 (0 sts 14), where t is time in months since the start of September 2004. (a) Use the model to estimate the monthly inflation rate in January 2005 (t = 4). Recall that the inflation rate is I'(t) (Round your answer to three decimal places.) I(t) % (b) Was inflation slowing or speeding up in January 2005? O slowing down O speeding up (c) When was inflation speeding up? When was inflation slowing? (Use the model to determine this.) Inflation was speeding up prior to --Select--- v 2005 and slowing after --Select--- v 2005.