The price of a TV set was $600 in 1999. In 2003 it was priced at $520. If the CPI in 1999 was 123 and 2003 is the base year, has the TV set become cheaper or more expensive in real terms in 2003?
A)Real-dollar cost of the TV set has not changed.
B)Real-dollar cost of the TV set has increased by 6.6%.
C)Real-dollar cost of the TV set has decreased by 6.6%.
D)Real-dollar cost of the TV set has decreased by 15.8%.
E)Real-dollar cost of the TV set has increased by 15.8%.

Question

Quizplus · Accepted Answer

The Answer of The price of a TV set was $600 in 1999. In 2003 it was priced at $520. If the CPI in 1999 was 123 and 2003 is the base year, has the TV set become cheaper or more expensive in real terms in 2003?
A)Real-dollar cost of the TV set has not changed.
B)Real-dollar cost of the TV set has increased by 6.6%.
C)Real-dollar cost of the TV set has decreased by 6.6%.
D)Real-dollar cost of the TV set has decreased by 15.8%.
E)Real-dollar cost of the TV set has increased by 15.8%.

The Price of a TV Set Was $600 in 1999