Question 1

Suppose a basket of goods and services has been selected to calculate the CPI. In 2002, the basket's cost was $80; in 2008, the basket's cost was $92; and in 2010, the basket's cost was $108. The base year must be

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Question 2

If the consumer price index changes from 125 in September to 150 in October, what is the rate of inflation?

Accepted Answer

To find the rate of inflation, we need to use the formula:

Rate of inflation = (CPI in current period - CPI in previous period) / CPI in previous period x 100%

Plugging in the numbers we get:

Rate of inflation = (150 - 125) / 125 x 100%
Rate of inflation = 25 / 125 x 100%
Rate of inflation = 0.2 x 100%
Rate of inflation = 20%

Therefore, the answer is B) 20.0%.

Question 3

Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been selected as the base year. In 2012, the basket's cost was $77; in 2013, the basket's cost was $82; and in 2014, the basket's cost was $90. The value of the CPI in 2014 was

Accepted Answer

To compute CPI we use the formula:
CPI for year t = (Cost of basket in year t/Cost of basket in base year) x 100

So, CPI for 2012 is 100 (because it is the base year).

CPI for 2013 = ($82/$77) x 100 = 106.5
CPI for 2014 = ($90/$77) x 100 = 116.9

Therefore, the value of the CPI in 2014 was 116.9.

To calculate the inflation rate, we use the formula:
Inflation rate = ((CPI year 2 - CPI year 1)/CPI year 1) x 100

In this case, the inflation rate between 2013 and 2014 would be:
((116.9 - 106.5)/106.5) x 100 = 9.8%

Therefore, the answer is C: 116.9 and the inflation rate was 9.8%.

Question 4

Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been selected as the base year. In 2012, the basket's cost was $50; in 2014, the basket's cost was $51; and in 2016, the basket's cost was $52. The value of the CPI in 2014 was

Accepted Answer

The answer of Suppose a basket of goods and services...

Question 5

If the consumer price index was 100 in the base year and 106 in the following year, then the inflation rate was

Accepted Answer

To calculate the inflation rate, we use the formula: Inflation rate = (CPI in year 2 - CPI in year 1) / CPI in year 1. Plugging in the values given, we get (106-100) / 100 = 0.06, which is equal to 6 percent. Therefore, the answer is B.

Question 6

Which of the following is the correct formula for calculating the inflation rate?

Accepted Answer

The correct formula for calculating the inflation rate is ((Price level in current period - Price level in previous period) / Price level in previous period) x 100. Choice C contains the correct hexadecimal value for the correct formula, which is 11eaa62b_aef4_93a2_842f_bfd644898d02_TB4802_11.

Question 7

Which of the following is the correct formula for calculating the consumer price index?

Accepted Answer

The correct formula for calculating the consumer price index is ((Cost of basket in current period) / (Cost of basket in base period)) x 100. Option B is the only one that includes the correct elements in the formula.

Question 8

From 2009 to 2010, the CPI for education increased from 279.3 to 281.8. What was the inflation rate for education between 2009 and 2010?

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The answer of From 2009 to 2010, the CPI for...

Question 9

The price index was 220 in one year and 238.2 in the next year. What was the inflation rate?

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The answer of The price index was 220 in one...

Question 10

Suppose a basket of goods and services has been selected to calculate the CPI and 2014 has been selected as the base year. In 2013, the basket's cost was $80; in 2014, the basket's cost was $86; and in 2015, the basket's cost was $90. The value of the CPI in 2015 was

Accepted Answer

The CPI in 2014 (base year) is by definition 100. Therefore,

CPI in 2014 = 100
CPI in 2015 = (Cost of basket in 2015 / Cost of basket in 2014) x 100 = (90/86) x 100 = 104.65 (rounded to one decimal place)

Therefore, the value of the CPI in 2015 was 104.6.

To calculate the inflation rate, we use the formula:

Inflation rate = [(CPI in year 2 - CPI in year 1) / CPI in year 1] x 100

In this case, the inflation rate = [(104.6 - 100) / 100] x 100 = 4.6%

Therefore, the correct answer is C (104.6 and the inflation rate was 4.6%).

Question 11

From 2013 to 2014, the CPI for medical care increased from 150 to 159. What was the inflation rate for medical care?

Accepted Answer

To find the inflation rate, we need to use the formula:
(Inflation rate) = ((CPI in the current year - CPI in the previous year) / CPI in the previous year) x 100%
Using the values given, we get:
((159 - 150) / 150) x 100% = 6.0%
Therefore, the inflation rate for medical care is 6.0 percent.

Question 12

Table 24-1
The table below lists annual consumer price index and inflation rates for a country over the period 2005-2010. Assume the year 2005 is used as the base year.
 
-Refer to Table 24-1. What belongs in space C?

Accepted Answer

To calculate the inflation rate for a given year, we use the formula:
Inflation rate = (CPI current year - CPI previous year)/CPI previous year x 100%
Using this formula, we can calculate the inflation rate for 2006 as:
Inflation rate 2006 = (130 - 120)/120 x 100% = 8.3%
Similarly, we can calculate the inflation rates for the remaining years:
Inflation rate 2007 = (135 - 130)/130 x 100% = 3.8%
Inflation rate 2008 = (145 - 135)/135 x 100% = 7.4%
Inflation rate 2009 = (155 - 145)/145 x 100% = 6.9%
Inflation rate 2010 = (165 - 155)/155 x 100% = 6.5%
Therefore, the correct answer is C, which represents the inflation rate for 2006. The inflation rate for 2006 is 8.3%, which is closest to 8.7%, the only option provided for space C.

Question 13

The price index was 136 in one year and 142 in the next year. What was the inflation rate between the two years?

Accepted Answer

To calculate the inflation rate, we use the formula: 
Inflation rate = ((Price index in year 2 - Price index in year 1)/Price index in year 1) x 100%

Plugging in the values given, we get:
Inflation rate = ((142-136)/136) x 100% = 4.41%

Therefore, the best choice is B as it is the the inflation rate calculated using the given formula.

Question 14

Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been selected as the base year. In 2012, the basket's cost was $50; in 2014, the basket's cost was $52; and in 2016, the basket's cost was $55. The value of the CPI in 2016 was

Accepted Answer

The answer of Suppose a basket of goods and services...

Question 15

If the consumer price index was 96 in 2012, 100 in 2013, and 102 in 2014, then the base year must be

Accepted Answer

The base year is the year against which other years are compared. In this case, we know that the CPI was 100 in 2013, which means that 2013 was the year used as the base year for comparison.

Question 16

For an imaginary economy, the value of the consumer price index was 140 in 2013 and 146.5 in 2014. The economy's inflation rate for 2014 was

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The answer of For an imaginary economy, the value of...

Question 17

Suppose a basket of goods and services has been selected to calculate the CPI and 2009 has been selected as the base year. In 2007, the basket's cost was $64; in 2009, the basket's cost was $68; and in 2011, the basket's cost was $70. The value of the CPI in 2011 was

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

Using the information given, we can calculate the CPI for 2011 as follows:

CPI = (70/68) x 100 = 102.94

Therefore, the answer is choice C, with a CPI of 102.94 in 2011.

Question 18

Suppose a basket of goods and services has been selected to calculate the CPI and 2014 has been selected as the base year. In 2012, the basket's cost was $50; in 2014, the basket's cost was $52; and in 2016, the basket's cost was $58. The value of the CPI in 2016 was

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
Using the given information:
For 2012: CPI = (50 / 52) x 100 = 96.2
For 2014 (base year): CPI = (52 / 52) x 100 = 100
For 2016: CPI = (58 / 52) x 100 = 111.5
Therefore, the value of the CPI in 2016 was 111.5.

Question 19

The price index was 120 in 2012 and 126 in 2013. What was the inflation rate?

Accepted Answer

The answer of The price index was 120 in 2012...

Question 20

Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been chosen as the base year. In 2012, the basket's cost was $80.00; in 2013, the basket's cost was $84; and in 2014, the basket's cost was $87.60. The value of the CPI was

Accepted Answer

The answer of Suppose a basket of goods and services...

Quiz 6: Measuring the Cost of Living

Suppose a basket of goods and services has been selected to calculate the CPI. In 2002, the basket's cost was $80; in 2008, the basket's cost was $92; and in 2010, the basket's cost was $108. The base year must be

If the consumer price index changes from 125 in September to 150 in October, what is the rate of inflation?

Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been selected as the base year. In 2012, the basket's cost was $77; in 2013, the basket's cost was $82; and in 2014, the basket's cost was $90. The value of the CPI in 2014 was

Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been selected as the base year. In 2012, the basket's cost was $50; in 2014, the basket's cost was $51; and in 2016, the basket's cost was $52. The value of the CPI in 2014 was

If the consumer price index was 100 in the base year and 106 in the following year, then the inflation rate was

Which of the following is the correct formula for calculating the inflation rate?

Which of the following is the correct formula for calculating the consumer price index?

From 2009 to 2010, the CPI for education increased from 279.3 to 281.8. What was the inflation rate for education between 2009 and 2010?

The price index was 220 in one year and 238.2 in the next year. What was the inflation rate?

Suppose a basket of goods and services has been selected to calculate the CPI and 2014 has been selected as the base year. In 2013, the basket's cost was $80; in 2014, the basket's cost was $86; and in 2015, the basket's cost was $90. The value of the CPI in 2015 was

From 2013 to 2014, the CPI for medical care increased from 150 to 159. What was the inflation rate for medical care?

Table 24-1 The table below lists annual consumer price index and inflation rates for a country over the period 2005-2010. Assume the year 2005 is used as the base year. -Refer to Table 24-1. What belongs in space C?

The price index was 136 in one year and 142 in the next year. What was the inflation rate between the two years?

Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been selected as the base year. In 2012, the basket's cost was $50; in 2014, the basket's cost was $52; and in 2016, the basket's cost was $55. The value of the CPI in 2016 was

If the consumer price index was 96 in 2012, 100 in 2013, and 102 in 2014, then the base year must be

For an imaginary economy, the value of the consumer price index was 140 in 2013 and 146.5 in 2014. The economy's inflation rate for 2014 was

Suppose a basket of goods and services has been selected to calculate the CPI and 2009 has been selected as the base year. In 2007, the basket's cost was $64; in 2009, the basket's cost was $68; and in 2011, the basket's cost was $70. The value of the CPI in 2011 was

Suppose a basket of goods and services has been selected to calculate the CPI and 2014 has been selected as the base year. In 2012, the basket's cost was $50; in 2014, the basket's cost was $52; and in 2016, the basket's cost was $58. The value of the CPI in 2016 was

The price index was 120 in 2012 and 126 in 2013. What was the inflation rate?

Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been chosen as the base year. In 2012, the basket's cost was $80.00; in 2013, the basket's cost was $84; and in 2014, the basket's cost was $87.60. The value of the CPI was