Question 1

The consumer price index for a given year measures the cost of living in that year relative to

Accepted Answer

The consumer price index (CPI) for a given year measures the cost of living in that year relative to what it was in the base year. The base year is assigned a value of 100, and the CPI for subsequent years reflects the percentage change in the cost of living relative to the base year.

Question 2

The consumer price index is a measure of the change in prices of a standard basket of

Accepted Answer

The consumer price index is calculated based on a standard basket of goods and services determined by household expenditure surveys. This basket includes goods and services that are commonly purchased by households, such as food, clothing, housing, and transportation. Therefore, option B is the best choice.

Question 3

A typical family on the Planet Econ consumes 10 pizzas,7 pairs of jeans,and 20 litres of milk.In 2011,pizzas cost $10 each,jeans cost $40 per pair,and milk costs $3 per litre.In 2012,the price of pizzas went down to $8 each,while the price of jeans and the price of milk remained the same.Between 2011 and 2012,a typical family's cost of living

Accepted Answer

The cost of living decreased because the price of pizzas, which are part of the family's consumption, decreased from $10 to $8 each. The total cost in 2011 was $10*10 + $40*7 + $3*20 = $100 + $280 + $60 = $440. In 2012, it was $8*10 + $40*7 + $3*20 = $80 + $280 + $60 = $420. The decrease is ($440 - $420) / $440 * 100% = 4.5%.

Question 4

If the price index is 130,this means that

Accepted Answer

A price index of 130 indicates that prices are 30% higher than in the base year, as the index is typically set to 100 in the base year.

Question 5

The consumer price index attempts to measure changes in the

Accepted Answer

The consumer price index (CPI) is calculated based on changes in the prices of a select market basket of goods and services that are commonly purchased by consumers. It represents the average price change of this market basket over time and is used as a measure of inflation.

Question 6

The consumer price index for Planet Econ consists of only two items: books and hamburgers.In 2011,the base year,the typical consumer purchased 10 books for $25 each and 25 hamburgers for $2 each.In 2012,the typical consumer purchased 15 books for $30 each and 30 hamburgers for $3 each.The consumer price index for 2012 on Planet Econ equals

Accepted Answer

The CPI is calculated by comparing the cost of the basket of goods in the current year to the cost in the base year. In 2011, the cost was (10 books * $25) + (25 hamburgers * $2) = $250 + $50 = $300. In 2012, the cost was (15 books * $30) + (30 hamburgers * $3) = $450 + $90 = $540. The CPI for 2012 is ($540 / $300) * 100 = 180.

Question 7

If the total expenditures of a typical family were $35,000 per year in 2008 and the exact same basket of goods and services cost $40,000 in the year 2012,the family's cost of living

Accepted Answer

The cost of living increased by 14% because the cost of the same basket of goods and services increased from $35,000 to $40,000.

Question 8

If the total expenditures of a typical family were $40,000 per year in 2008 and the exact same basket of goods and services cost $45,000 in the year 2012,the family's cost of living

Accepted Answer

To calculate the percent increase in cost of living, we use the formula: ((New Value - Old Value) / Old Value) x 100%. Plugging in the values, we get ((45000 - 40000) / 40000) x 100% = 12.5%. Therefore, the cost of living increased by 12.5%. The only option that represents this is choice letter C.

Question 9

The consumer price index (CPI)is all of the following EXCEPT the

Accepted Answer

The CPI measures the average level of prices relative to prices in the base year, the cost of a standard basket of goods and services relative to the cost of the same basket in the base year, and the cost of living relative to the base year. It does not measure the rate of inflation between the current period and the base year.

Question 10

A typical family on the Planet Econ consumes 10 pizzas,7 pairs of jeans,and 20 litres of milk.In 2011 pizzas cost $10 each,jeans cost $40 per pair,and milk costs $3 per litre.In 2012,the price of pizzas increased to $14 each,while the price of jeans and the price of milk remained the same.Between 2011 and 2012,a typical family's cost of living

Accepted Answer

The cost of living increased by 9%. In 2011, the total cost was $10*10 + $40*7 + $3*20 = $100 + $280 + $60 = $440. In 2012, the cost was $14*10 + $40*7 + $3*20 = $140 + $280 + $60 = $480. The increase is ($480 - $440) / $440 * 100% = 9.09%.

Question 11

Suppose total expenditures for a typical household in 2009 were $4,500 per month and that the cost of purchasing exactly the same items in 2012 was $6,975 per month.If 2009 is the base year,the consumer price index (CPI)for 2012 equals

Accepted Answer

The CPI is calculated as (Cost in current year / Cost in base year) x 100. So, (6975 / 4500) x 100 = 155.

Question 12

Suppose total expenditures for a typical household in 2009 were $2,500 per month and that the cost of purchasing exactly the same items in 2012 was $3,200 per month.If 2009 is the base year,the consumer price index (CPI)for 2012 equals

Accepted Answer

The CPI for 2012 is calculated by dividing the cost of the basket in 2012 by the cost of the basket in the base year (2009) and then multiplying by 100. So, (3200/2500) * 100 = 128.

Question 13

Suppose total expenditures for a typical household in 2002 were $5,500 per month,while the cost of purchasing exactly the same items in 2012 was $6,875.If 2002 is the base year,the consumer price index (CPI)for the year 2012 equals

Accepted Answer

To calculate the CPI, we use the following formula:

CPI = (cost of market basket in current year / cost of market basket in base year) x 100

From the given information, we know that the cost of the same items in 2012 is $6,875, and the cost of the items in 2002 is the base year and is therefore equal to $5,500.

So, CPI = (6,875 / 5,500) x 100

CPI = 125

Therefore, the answer is D) 125.

Question 14

Suppose total expenditures for a typical household in 2009 were $3,300 per month and that the cost of purchasing exactly the same items in 2012 was $3,993 per month.If 2009 is the base year,the consumer price index (CPI)for 2012 equals

Accepted Answer

To calculate the CPI, we use the formula:
CPI = (Cost of Basket in Current Year/Cost of Basket in Base Year) x 100
In this case, the cost of the basket in 2009 is the base year, so we have:
CPI = (3993/3300) x 100
CPI = 1.21 x 100
CPI = 121
Therefore, the answer is D) 121.

Question 15

Suppose total expenditures for a typical household in 2002 were $5,500 per month,while the cost of purchasing exactly the same items in 2012 was $7,150.If 2002 is the base year,the consumer price index (CPI)for 2012 equals

Accepted Answer

The answer of Suppose total expenditures for a typical household...

Question 16

Suppose total expenditures for a typical household in 2002 were $2,500 per month,while the cost of purchasing exactly the same items in 2012 was $3,000.If 2002 is the base year,the consumer price index (CPI)for the year 2012 equals

Accepted Answer

The CPI is calculated as (Cost in Current Year / Cost in Base Year) x 100. So, (3000 / 2500) x 100 = 120.

Question 17

The measure of the cost of a standard basket of goods and services in any period,relative to the cost of the same basket of goods and services in the base year,is called the

Accepted Answer

The measure described is commonly known as the Consumer Price Index (CPI), which compares the cost of a standard basket of goods and services in a given period to the cost of the same basket of goods and services in a base year. The CPI is widely used as a cost-of-living indicator and to track inflation. Option A is a synonym of CPI. Option B and D are incorrect terms. Option E is an inappropriate term as it does not represent the calculation of inflation.

Question 18

The consumer price index for the current year measures the cost of a standard basket in the ________ year relative to the cost of the same basket in the ________ year.

Accepted Answer

The consumer price index (CPI) measures the cost of a standard basket of goods and services in the current year relative to the cost of the same basket in the base year.

Question 19

The consumer price index (CPI)is a measure of the

Accepted Answer

The CPI is a measure of the average level of prices relative to prices in the base year. It is used as an indicator of inflation because it reflects changes in the cost of living over time.

Question 20

The consumer price index for Planet Econ consists of only two items: books and hamburgers.In 2011,the base year,the typical consumer purchased 10 books for $20 each and 200 hamburgers for $1 each.In 2012,the typical consumer purchased 12 books for $23 each and 300 hamburgers for $1.15 each.The consumer price index for 2012 on Planet Econ equals

Accepted Answer

The answer of The consumer price index for Planet Econ...

Quiz 6: Fiscal Policy

The consumer price index for a given year measures the cost of living in that year relative to

The consumer price index is a measure of the change in prices of a standard basket of

If the price index is 130,this means that

The consumer price index attempts to measure changes in the

If the total expenditures of a typical family were $35,000 per year in 2008 and the exact same basket of goods and services cost $40,000 in the year 2012,the family's cost of living

If the total expenditures of a typical family were $40,000 per year in 2008 and the exact same basket of goods and services cost $45,000 in the year 2012,the family's cost of living

The consumer price index (CPI) is all of the following EXCEPT the

Suppose total expenditures for a typical household in 2009 were $4,500 per month and that the cost of purchasing exactly the same items in 2012 was $6,975 per month.If 2009 is the base year,the consumer price index (CPI) for 2012 equals

Suppose total expenditures for a typical household in 2009 were $2,500 per month and that the cost of purchasing exactly the same items in 2012 was $3,200 per month.If 2009 is the base year,the consumer price index (CPI) for 2012 equals

Suppose total expenditures for a typical household in 2002 were $5,500 per month,while the cost of purchasing exactly the same items in 2012 was $6,875.If 2002 is the base year,the consumer price index (CPI) for the year 2012 equals

Suppose total expenditures for a typical household in 2009 were $3,300 per month and that the cost of purchasing exactly the same items in 2012 was $3,993 per month.If 2009 is the base year,the consumer price index (CPI) for 2012 equals

Suppose total expenditures for a typical household in 2002 were $5,500 per month,while the cost of purchasing exactly the same items in 2012 was $7,150.If 2002 is the base year,the consumer price index (CPI) for 2012 equals

Suppose total expenditures for a typical household in 2002 were $2,500 per month,while the cost of purchasing exactly the same items in 2012 was $3,000.If 2002 is the base year,the consumer price index (CPI) for the year 2012 equals

The measure of the cost of a standard basket of goods and services in any period,relative to the cost of the same basket of goods and services in the base year,is called the

The consumer price index for the current year measures the cost of a standard basket in the year relative to the cost of the same basket in the year.

The consumer price index (CPI) is a measure of the