Question 1

Table 9-17
 
-Refer to Table 9-17.Looking at the table above,real average hourly earnings in 2015 were

Accepted Answer

The answer of Table 9-17
 
-Refer to Table 9-17.Looking at...

Question 2

Table 9-14
  The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010.
-Refer to Table 9-14.The real average hourly earnings for 1965 in 2010 dollars equal

Accepted Answer

The answer of Table 9-14
  The table above reports...

Question 3

Table 9-14
  The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010.
-Refer to Table 9-14.The real average hourly earnings for 1965 in 1982-1984 dollars equal

Accepted Answer

To find the real average hourly earnings for 1965 in 1982-1984 dollars, we need to adjust the nominal earnings for inflation using the consumer price index (CPI) for 1982-1984. The formula to compute real earnings is:

Real Earnings = Nominal Earnings x Base Year CPI / Year CPI

For 1965, the nominal earnings were $2.65 and the year CPI was 31.5. To convert to 1982-1984 dollars, we use the base year CPI of 97.6. Thus,

Real Earnings = $2.65 x 97.6 / 31.5 = $8.28

Therefore, the real average hourly earnings for 1965 in 1982-1984 dollars equal $8.28.

Question 4

If your nominal wage rises faster than the price level,we can say your real wage has ________ and the purchasing power of your income has ________.

Accepted Answer

If your nominal wage rises faster than the price level, it means that the purchasing power of your income has increased. Therefore, your real wage has risen as well.

Question 5

The real wage equals the nominal wage ________ the CPI,all times 100.

Accepted Answer

The real wage is calculated by dividing the nominal wage by the Consumer Price Index (CPI) and then multiplying by 100. This adjusts the nominal wage for inflation, providing a measure of the purchasing power of the wage.

Question 6

Suppose your grandfather earned a salary of $12,000 in 1964.If the CPI is 31 in 1964 and 219 in 2016,then the value of your grandfather's salary in 2016 dollars is approximately

Accepted Answer

The answer of Suppose your grandfather earned a salary of...

Question 7

If your nominal wage rises more slowly than the price level,we can say your real wage has ________ and the purchasing power of a dollar has ________.

Accepted Answer

If your nominal wage rises more slowly than the price level, it means the purchasing power of your wage has decreased. Therefore, your real wage has fallen. Additionally, if the purchasing power of your wage has decreased, it means the value of a dollar has decreased in terms of purchasing power. Thus, the purchasing power of a dollar has also fallen.

Question 8

Table 9-16
 
-Refer to Table 9-16.Looking at the table above,real wages ________ from 2014 to 2015,and real wages ________ from 2015 to 2016.

Accepted Answer

According to the table, real wages decreased from 2014 to 2015 (-2.5%) and then increased from 2015 to 2016 (+3.7%). Therefore, the correct answer is C) fell; rose.

Question 9

Table 9-14
  The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010.
-Refer to Table 9-14.The percentage change in real average earnings from 1965 to 2010 equals

Accepted Answer

To find the percentage change in real average earnings, we need to adjust the nominal earnings for inflation. We can use the consumer price index (CPI) to do so.

First, we need to calculate the inflation rate from 1965 to 2010.

Inflation rate = ((CPI in 2010 - CPI in 1965) / CPI in 1965) * 100 
= ((218.056 - 31.5) / 31.5) * 100 
= 592.6%

This means that prices increased by 592.6% from 1965 to 2010.

Next, we need to adjust the nominal hourly earnings using the inflation rate.

Real earnings in 1965 = $2.82 / (1 + 0.0) = $2.82 
Real earnings in 2010 = $19.61 / (1 + 5.926) = $3.29

The percentage change in real average earnings from 1965 to 2010 is:

((Real earnings in 2010 - Real earnings in 1965) / Real earnings in 1965) * 100 
= (($3.29 - $2.82) / $2.82) * 100 
= 16.7%

Therefore, the correct answer is C) 24.6%.

Question 10

Table 9-13
 
-Refer to Table 9-13.Consider a simple economy that produces only three products: tacos,earplugs,and toothbrushes.Use the information in the table to calculate the inflation rate for 2016,as measured by the consumer price index.

Accepted Answer

The answer of Table 9-13
 
-Refer to Table 9-13.Consider a...

Question 11

Table 9-12
 
-Refer to Table 9-12.Consider a simple economy that produces only three products: burritos,flashlights,and golf balls.Use the information in the table to calculate the inflation rate for 2016,as measured by the consumer price index.

Accepted Answer

The answer of Table 9-12
 
-Refer to Table 9-12.Consider a...

Question 12

Table 9-15
 
-Refer to Table 9-15.Looking at the table above,real average hourly earnings in 2014 were

Accepted Answer

The correct answer is $10, as indicated in the table for real average hourly earnings in 2014.

Question 13

The producer price index tracks the prices firms receive for goods and services at all stages of production.

Accepted Answer

This is correct. The producer price index measures the average change over time in the selling prices received by domestic producers for their output. It includes prices at all stages of production, including raw materials, intermediate goods, and finished goods.

Question 14

List three different price indices and explain how they differ in terms of the market basket on which they are based.

Accepted Answer

The answer of List three different price indices and explain...

Question 15

Table 9-15
 
-Refer to Table 9-15.Looking at the table above,real average hourly earnings were equal to ________ in 2015.

Accepted Answer

According to the table, the real average hourly earnings in 2015 were $9.52.

Question 16

Explain how the CPI is constructed.

Accepted Answer

The answer of Explain how the CPI is constructed....

Question 17

Table 9-17
 
-Refer to Table 9-17.Looking at the table above,real average hourly earnings between 2015 and 2016 changed by

Accepted Answer

The answer of Table 9-17
 
-Refer to Table 9-17.Looking at...

Question 18

You earned $30,000 in 2007,and your salary rose to $80,000 in 2016.If the CPI rose from 82 to 202 between 2007 and 2016,which of the following is true?

Accepted Answer

The answer of You earned $30,000 in 2007,and your salary...

Question 19

Why does the substitution bias cause the consumer price index to overstate inflation and the cost of living? Why does the increase in quality bias cause the consumer price index to overstate inflation and the cost of living?

Accepted Answer

The answer of Why does the substitution bias cause the...

Question 20

The CPI in 1990 was 131,and the CPI in 2010 was 218.If you earned a salary of $40,000 in 1990,what would be a salary with equivalent purchasing power in 2010?

Accepted Answer

To find the equivalent salary in 2010 dollars, we need to adjust the 1990 salary for inflation using the CPI. The inflation rate can be calculated as (CPI in 2010 - CPI in 1990) / CPI in 1990 = (218-131)/131 = 0.6641. This means that prices increased by 66.41% between 1990 and 2010. To adjust the salary, we multiply it by the inflation rate and then add it to the original salary: $40,000 * 1.6641 = $66,564. Therefore, the answer is B.

Quiz 9: Unemployment and Inflation

Table 9-17 -Refer to Table 9-17.Looking at the table above,real average hourly earnings in 2015 were

Table 9-14 The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010. -Refer to Table 9-14.The real average hourly earnings for 1965 in 2010 dollars equal

Table 9-14 The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010. -Refer to Table 9-14.The real average hourly earnings for 1965 in 1982-1984 dollars equal

If your nominal wage rises faster than the price level,we can say your real wage has and the purchasing power of your income has .

The real wage equals the nominal wage ________ the CPI,all times 100.

Suppose your grandfather earned a salary of $12,000 in 1964.If the CPI is 31 in 1964 and 219 in 2016,then the value of your grandfather's salary in 2016 dollars is approximately

If your nominal wage rises more slowly than the price level,we can say your real wage has and the purchasing power of a dollar has .

Table 9-16 -Refer to Table 9-16.Looking at the table above,real wages from 2014 to 2015,and real wages from 2015 to 2016.

Table 9-14 The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010. -Refer to Table 9-14.The percentage change in real average earnings from 1965 to 2010 equals

Table 9-13 -Refer to Table 9-13.Consider a simple economy that produces only three products: tacos,earplugs,and toothbrushes.Use the information in the table to calculate the inflation rate for 2016,as measured by the consumer price index.

Table 9-12 -Refer to Table 9-12.Consider a simple economy that produces only three products: burritos,flashlights,and golf balls.Use the information in the table to calculate the inflation rate for 2016,as measured by the consumer price index.

Table 9-15 -Refer to Table 9-15.Looking at the table above,real average hourly earnings in 2014 were

The producer price index tracks the prices firms receive for goods and services at all stages of production.

List three different price indices and explain how they differ in terms of the market basket on which they are based.

Table 9-15 -Refer to Table 9-15.Looking at the table above,real average hourly earnings were equal to ________ in 2015.

Explain how the CPI is constructed.

Table 9-17 -Refer to Table 9-17.Looking at the table above,real average hourly earnings between 2015 and 2016 changed by

You earned $30,000 in 2007,and your salary rose to $80,000 in 2016.If the CPI rose from 82 to 202 between 2007 and 2016,which of the following is true?

Why does the substitution bias cause the consumer price index to overstate inflation and the cost of living? Why does the increase in quality bias cause the consumer price index to overstate inflation and the cost of living?

The CPI in 1990 was 131,and the CPI in 2010 was 218.If you earned a salary of $40,000 in 1990,what would be a salary with equivalent purchasing power in 2010?

Quiz 9: Unemployment and Inflation

Table 9-17 -Refer to Table 9-17.Looking at the table above,real average hourly earnings in 2015 were

Table 9-14 The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010. -Refer to Table 9-14.The real average hourly earnings for 1965 in 2010 dollars equal

Table 9-14 The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010. -Refer to Table 9-14.The real average hourly earnings for 1965 in 1982-1984 dollars equal

If your nominal wage rises faster than the price level,we can say your real wage has ________ and the purchasing power of your income has ________.

The real wage equals the nominal wage ________ the CPI,all times 100.

Suppose your grandfather earned a salary of $12,000 in 1964.If the CPI is 31 in 1964 and 219 in 2016,then the value of your grandfather's salary in 2016 dollars is approximately

If your nominal wage rises more slowly than the price level,we can say your real wage has ________ and the purchasing power of a dollar has ________.

Table 9-16 -Refer to Table 9-16.Looking at the table above,real wages ________ from 2014 to 2015,and real wages ________ from 2015 to 2016.

Table 9-14 The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010. -Refer to Table 9-14.The percentage change in real average earnings from 1965 to 2010 equals

Table 9-13 -Refer to Table 9-13.Consider a simple economy that produces only three products: tacos,earplugs,and toothbrushes.Use the information in the table to calculate the inflation rate for 2016,as measured by the consumer price index.

Table 9-12 -Refer to Table 9-12.Consider a simple economy that produces only three products: burritos,flashlights,and golf balls.Use the information in the table to calculate the inflation rate for 2016,as measured by the consumer price index.

Table 9-15 -Refer to Table 9-15.Looking at the table above,real average hourly earnings in 2014 were

The producer price index tracks the prices firms receive for goods and services at all stages of production.

List three different price indices and explain how they differ in terms of the market basket on which they are based.

Table 9-15 -Refer to Table 9-15.Looking at the table above,real average hourly earnings were equal to ________ in 2015.

Explain how the CPI is constructed.

Table 9-17 -Refer to Table 9-17.Looking at the table above,real average hourly earnings between 2015 and 2016 changed by

You earned $30,000 in 2007,and your salary rose to $80,000 in 2016.If the CPI rose from 82 to 202 between 2007 and 2016,which of the following is true?

Why does the substitution bias cause the consumer price index to overstate inflation and the cost of living? Why does the increase in quality bias cause the consumer price index to overstate inflation and the cost of living?

The CPI in 1990 was 131,and the CPI in 2010 was 218.If you earned a salary of $40,000 in 1990,what would be a salary with equivalent purchasing power in 2010?

If your nominal wage rises faster than the price level,we can say your real wage has and the purchasing power of your income has .

If your nominal wage rises more slowly than the price level,we can say your real wage has and the purchasing power of a dollar has .

Table 9-16 -Refer to Table 9-16.Looking at the table above,real wages from 2014 to 2015,and real wages from 2015 to 2016.