QUESTION 3 The consumer price index is a. a perfect measure of the cost of living. b. not very useful as a measure of the cost of living. c. a useful measure, but not a perfect measure, of the cost of living. d. not used as a measure of the cost of living.
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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?Why is the GDP deflator not an accurate measure of inflation as it impacts a household?What are the main components of measuring GDP with what is demanded?
- What is the measure of the income earned by owners of resources used in making final goods and services? a. personal income b. gross domestic income c. retained earnings d. national income1-Suppose the initial BLS survey (2000), used to measure CPI shows that the CPI basket has 3 Medical and 20 foods. The initial base period prices are, Medical 20 each and food $2 cach. Next suppose that the BLS survey taken in 2011 reveals that the price of Medial cost is $35 and the price of foods is $4. A-Calculate the cost of the CPI basket in 20007 B-Calculate the cost of the CPI basket in 2011? C-Calculate the inflation rate in that period?a What are the total payments (income) to factors of Better-bald b What are the total payments (income) to factors of Sweeter Sweaters c What is the GDP for this economy
- Economics If the prices of German made cars imported into the United States Fall, which answer is correct? Provide justification please thanks A. the consumer price index will fall, but the GDP deflator will not fall B. both the GDP deflator and the consumer price index will fall c. neither the gdp deflator nor the CPI will fall d. the GDP deflator will fall but the consumer price index will not fall. d. the gdp deflator will fall but the consumer price index will not fall.1. One day, Chinedu the Barber, Inc., collects D400 for haircuts. Over this day, his equipment depreciates in value by D50. Of the remaining D350, Chinedu sends D30 to the government in sales taxes, takes home D220 in wages, and retains D100 in his business to add new equipment in the future. From the D220 that Chinedu takes home, he pays D70 in income taxes. Based on this information, compute Chinedu’s contribution to the following measures of income.a. gross domestic productb. net national productc. national incomed. personal incomee. disposable personal income3. The basket of goods contains 3 Hot Dogs and 3 Hamburgers.Year Price of Hot DogsPrice of Hamburgers2006 $1.50 $3.452007 $2.15 $3.202008 $2.10 $4.00 a. Calculate the cost of the basket of goods each year. Show your working. b. Calculate the CPI for each year using 2007 as the base year. c. Calculate the inflation rate for each year.
- 19. Real national income means: (a) national income at current prices (b) national income at factor prices (c) national income at constant prices (d) national income at average prices of the past 10 yean 20. GDP Deflator = Realincome (a) Nominalincome Nominalincome (b) x 100 x 100 Realincome Realincome (c) Population x 100 (d) None of these 21. Increase in price of commodities due to increase in taxes assumes relevance in the estimation of NNP, because: MP (a) taxes are compulsory payments (b) taxes are transfer payments (c) taxes are paid out of income of the households a cause a rise in market price of the commodities which otherwise would have been sold at a lower price6) a. The Consumer Price Index (CPI) is determined by estimating the prices of goods and services in the economy at the same rate as the cost of living increases. comparing the value of a market basket of goods that consumers typically purchase to the value of the basket in cities around the country. averaging all the prices of goods and services in the economy. comparing the value of a market basket of goods that consumers typically purchase to the value of the basket in a base year. b. The Bureau of Labor Statistics (BLS) would calculate the rate of inflation for year 5 by adding the CPI of year 4 to the CPI of year 5, and then dividing by 2. adding the CPI of year 4 to the CPI of year 5, and then dividing by the average of year 4 and year 5. subtracting the CPI of year 4 from the CPI of year 5, and then dividing by the CPI of year 5. subtracting the CPI of year 4 from the CPI of year 5, and then dividing by the CPI of year…A In 2020, it was estimated that the US had 140.8M Housing Units. The homeownership rate in the US is 65.6%. The average monthly rent in the US is $1,098 while the average home price is $284,600. The rent to value ratio in the US is 6.26%. Americans spent $325B on home maintenance costs. If GDP is $22T, housing services makes up what percentage of GDP? a) 12.6% b) 8.9% c) 14.5% d) 5.7% 7) There were around 45 billion credit card transactions in 2019 totaling $3.64 trillion. Surveys show that 44% of credit card holders pay off their full balance every month (are not financing their purchases). Further, merchants pay processing fees of around 2% of the transaction and consumers pay $120B in annual fees. We have the following interest rate information. Interest Rate Average Credit Card Rate 3 Month Treasury 14.5% 0.35% The contribution of credit cards to Gross Output for the US is: a) $707.9B b) $192.8B c) $481.2B d) $120B 8) Consider the following information for prices in France…