Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Textbook Question
Chapter 6.1, Problem 3ST
In year 1, your annual income is $45,000 and the
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The price tag on a tennis ball in 1975 read $0.10, and the price tag on a tennis ball in 2005 read $1.00. The CPI in 1975 was 52.3, and the CPI in 2005 was 191.3. Refer to Scenario 24-1. The price of a 1975 tennis ball in 2005 dollars is Question 2 options: $0.03. $0.27. $0.37. $1.00.
Suppose a person's nominal income is $74,280 in the current year, and the CPI for the current year is
120. The person's current real income, in base year dollars, is:
$61,900.
$64,000.
$78,412.
$89,136.
Suppose the nominal median household income for a family of four in the United States was $24,618.00 in 1985, $36,678.00 in 1995, $50,326.00 in 2005, and $53,276.00 in 2010.You will need to know that the CPI (multiplied by 100, 1982–1984 = 100) was 108.6 in 1985, 153.4 in 1995, 196.3 in 2005, and 219.1 in 2010.Instructions: Enter your responses rounded to two decimal places.
Year
Real Income
1985
$
1995
$
2005
$
2010
$
Between 1985 and 2005, the real median household income (Click to select) rose declined stayed constant .
Between 2005 and 2010, the real median household income (Click to select) rose declined stayed constant .
rev: 01_31_2019_QC_CS-155719
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
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- Suppose the nominal median household income for a family of four in the United States was $24,618.00 in 1985, $36,678.00 in 1995, $50,326.00 in 2005, and $53,276.00 in 2010.You will need to know that the CPI (multiplied by 100, 1982–1984 = 100) was 108.6 in 1985, 153.4 in 1995, 196.3 in 2005, and 219.1 in 2010.Instructions: Enter your responses rounded to two decimal places. Year Real Income 1985 $ 1995 $ 2005 $ 2010 $ Between 1985 and 2005, the real median household income (Click to select) rose declined stayed constant . Between 2005 and 2010, the real median household income (Click to select) .arrow_forwardWhile rooting through the attic, you discover a box of old tax forms. You find that your grandmother made $175 working part-time during December 1964, when the CPI was 31.3. How much would you need to have earned in December 2014, when the CPI was 234.8, to have at least as much real income as your grandmother did in 1964? Give your answer to two decimals.arrow_forwardA consumer has two goods in his consumption bundle: bread and coffee. The current price of bread is $4.00 per loaf and the price of coffee is $20.00 per cup. This consumer currently buys 2 loaves of bread per week and 5 cups of coffee. Suppose that the price of bread increases by 5% and the price of coffee increases by 15% Using this current consumption bundle, calculate the value of the CPI for this consumer. CPI = response rounded to two decimal places). (enter yourarrow_forward
- The world price of oil has risen recently. For Australia (which is a net exporter of oil), this development will imply that the CPI will increase by much more than the GDP deflator.arrow_forwardIn 2020, the value of the Consumer Price Index (CPI) in a certain country, Polonia, was 235 and median ( nominal) household income was $33,400. In 1950, the CPI was 89 and median (nominal) household income was $8,300. calculate median real household income in 1950, and in 2020, using 2020 as a base yeararrow_forwardBased on surveys conducted by the BLS, the CPI basket assigns a weight of approximately 15% to transportation spending. Suppose you walk to your workplace every day and you do not use any other means of transportation. With everything else the same, if the price of transportation services increases by 10%, by how much would the CPI increase? Is the CPI measuring the true change in your cost of living?arrow_forward
- In 2007, Annie, an 80-year-old, is telling her granddaughter Mary about the good old days. Annie says that in 1932, you could buy a nice house for $17,000 and a jacket for $6. Mary says that in 2007 such a house costs $250,000 and such a jacket costs $55. The CPI in 1932 was 14.4 and in 2007 it was 207.3. ..... The house with the lower price is the. and the jacket with the lower price is the O A. $17,000 house in 1932; $55 jacket in 2007 B. $250,000 house in 2007; $6 jacket in 1932 OC. $250,000 house in 2007; $55 jacket in 2007 D. $17,000 house in 1932; $6 jacket in 1932arrow_forwardIn Brazil, the reference base period for the CPI is 2000. By 2016, prices had risen by 187 percent since the base period. The inflation rate in Brazil in 2017 was 3.4 percent, and in 2018, the inflation rate was 3.7 percent. Calculate the CPI in Brazil in 2017 and 2018. Brazil's CPI in 2019 was 318. Did Brazil's cost of living increase or decrease in 2019? The CPI in Brazil for 2017 is >>> Answer to 1 decimal place.arrow_forwardIn Brazil, the reference base period for the CPI is 2000. By 2016, prices had risen by 187 percent since the base period. The inflation rate in Brazil in 2017 was 3.4 percent, and in 2018, the inflation rate was 3.7 percent. Calculate the CPI in Brazil in 2017 and 2018. Brazil's CPI in 2019 was 318. Did Brazil's cost of living increase or decrease in 2019? The CPI in Brazil for 2017 is >>> Answer to 1 decimal place. The CPI in Brazil for 2018 is >>> Answer to 1 decimal place. Brazil's cost of living in 2019. O A. decreased O B. changed by an unknown amount O C. remained the same O D. increased Click to select your answer(s). DD DII F10 I F9 20 888 F8 F7 F6 F5 F4 F3 esc F2 F1 & ! @ # 2 3 4 1 Q W E tah H K * 00 T %24arrow_forward
- 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 Using a method similar to the CPI, compute the percentage change in the overall price levelarrow_forwardIn 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? Numberarrow_forward
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