Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 6, Problem 3QP
To determine
The total dollar expenditure.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
A small nation of 10 people idolizes the TV show The Voice. All they produce and consume are karaoke machines and CDs, in the following amounts: Karaoke Machines CDs Quantity Price Quantity Price (Dollars) (Dollars) 2020 10 20 50 13 2021 15 30 60 15 Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is . (Note: Use 2020 as the base year, and fix the basket at 1 karaoke machine and 5.
A small nation of 10 people idolizes the TV show The Voice. All they produce and consume are karaoke machines and CDs, in the following amounts:
Karaoke Machines
CDs
Quantity
Price
Quantity
Price
(Dollars)
(Dollars)
2020
10
40
30
10
2021
12
60
50
12
Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is . (Note: Use 2020 as the base year, and fix the basket at 1 karaoke machine and 3 CDs.)
Using a method similar to that used to calculate the GDP deflator, the percentage change of the overall price level is . (Note: Again, use 2020 as the base year.)
Which of the following statements is correct?
1.The GDP deflator holds the basket of goods and services constant.
2.The inflation rate in 2021 is not the same using the two methods.
3. The CPI allows the basket of goods and services to change.
Britney is a baseball fan and attends several games per season. Her expenses per
season are listed in the table below:
Year
2
Year 1
5
Baseball $500$560
Tickets
Jersey
$120 $150
$150 $160
Food
Transport $60 S$70
Assuming that year 1 is the base year, calculate the price index for year 1 and for
year 2.
100, 113
100, 88
88, 113
88, 100
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
Knowledge Booster
Similar questions
- Ff.280.arrow_forwardThe following table shows a hypothetical situation for an economy that uses for an average household of four people a basket of only three products to calculate the consumer price index (CPI) between the years 2015 and 2018. Product Product A 20 Product B Product C 98 100 131 133 50 2015 4 Quantity Price $50 $52 $56 $100 55 $105 61 $113 $1,200 5 $1,210 5 $1,230 If the base year is 2015, what is the value of the consumer price index in 2015? (round to the closest integer) a 22 2016 P Q 23 2017 P Q $55 $111 $1,225 22 62 2018 5 Parrow_forwardThe table identifies the prices (P1 and P2) of three goods in two different years, and it shows the market basket that is used to calculate the consumer price index. The base year is year 1. Good P1 P2 Basket Milk $4 (gallons) $4.20 6 Chicken $5 (pounds) $5.50 |12 Carrots $2 |(bags) $2.40 4 Enter numbers in each blank, rounded to two decimal places as necessary. The value of the CPI in year 1 is The value of the CPI in year 2 is The inflation rate is equal to %.arrow_forward
- Solve it correctly please.arrow_forwardConsider an economy that produces and consumes bread and automobiles. In the following table are data for two different years. Year 2000 2010 Price of an automobile $40,000 $50,000 Price of a loaf bread $20 $30 Number of auto-mobiles produced 100 cars 120 cars Number of loaves of bread produced 600,000 loaves 500,000 loaves Using the year 2000, compute the following statistics for each year: nominal GDP, real GDP, the implicit price deflator for GDP, and a fixed-weight price index such as CPI. How much have prices risen between year 2000 and year 2010? Compare answers given by Laspeyres and Passche price indices. Suppose you are a senior public servant writing a bill to index Social Security and pensions. That is your bill will adjust these benefits to offset changes in the cost of living. Will you use the GDP deflator or the CPI? Explain emphasis on questions 2 and 3 .arrow_forwardConsider an economy that produces and consumes hot dogs and hamburgers. In the following table are data for two different years. Good Hot dogs 120 2010 Hamburgers 200 150 160 Quantity Price Quantity Price 200 2020 None of the above. $2 250 Using 2010 as the base year, what is the implicit price deflator in 2020? $3 500 $4 $4arrow_forward
- In an economy, the total expenditure for a market basket of goods in year 1 ( the base year) was $4000. In year 2, the total expenditure for the same basket of goods was $ 4000. What was the price index for the economy in year 1? Year 2?arrow_forwardSuppose that the British economy produces two goods: laptops and books. The quantity produced and the prices of these items for 2015 and 2016 are shown in the table below. Year 2015 2016 Quantities Produced Laptops 50 Books 1,000 Laptops 90 Books ? Price ($) Laptopa Books 7 Laptops 170 Books B 200 Instructions: In part a, round your answer to two decimal places. In part b, enter your answer as a whole number. In part c, round your answer to one decimal place. a. Let's assume that the base year was 2015, so that real GDP in 2015 equals nominal GDP in 2015. If the real GDP in Britain was $15,000 in 2015, the price of books was: $[ b. Using your answer from part (a), if the growth rate in nominal GDP was 15% | books must have been produced in 2016. Using your answers from parts (a) and (b), the growth rate in real GDP between 2015 and 2016 was: %arrow_forwardWhy do economists use index numbers to measure the price level rather than dollar value of goods?arrow_forward
- What will be the National income at current price if current price is $300 and the current quantity is 2000 unitsarrow_forwardThree goods are consumed in an economy during years 1 and 2. The table shows prices (P1 and P2) for each good, and it shows the market basket that is used to calculate the consumer price index. The base year is year 1. Good P1 P2 Basket Milk $4 (gallons) $4.20 12 Beef $2 (pounds) $2.20 20 Carrots $3 (bags) $3.60 8 Enter numbers in each blank, rounded to two decimal places as necessary. The value of the CPI in year 1 is and the value of the CPI in year 2 is ASUSarrow_forward[Consider the effects of an increase in the global price of oil. For a country such as Australia, which is a net exporter of oil, this development will imply that the CPI will increase roughly by the same amount as the increase in the GDP deflator.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
- Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc