macro sheflin hwk 7

macro sheflin hwk 7 - hw7 Multiple Choice Identify the...

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hw7 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. When the consumer price index rises, the typical family a. has to spend more dollars to maintain the same standard of living. b. can spend fewer dollars to maintain the same standard of living. c. finds that its standard of living is not affected. d. can offset the effects of rising prices by saving more. 2. The consumer price index is used to a. track changes in the level of wholesale prices in the economy. b. monitor changes in the cost of living. c. monitor changes in the level of real GDP. d. track changes in the stock market. 3. The consumer price index is used to a. differentiate gross national product from net national product. b. turn dollar figures into meaningful measures of purchasing power. c. characterize the types of goods and services that consumers purchase. d. measure the quantity of goods and services that the economy produces. 4. The term inflation is used to describe a situation in which a. the overall level of prices in the economy is increasing. b. incomes in the economy are increasing. c. stock-market prices are rising. d. the economy is growing rapidly. 5. The CPI is a measure of the overall cost of a. inputs purchased by a typical producer. b. goods and services bought by a typical consumer. c. goods and services produced in the economy. d. stocks on the New York Stock Exchange. 6. Which of the following agencies calculates the CPI? a. the National Price Board b. the Department Of Weight and Measurements c. the Bureau of Labor Statistics d. the Congressional Budget Office 7. What basket of goods is used to construct the CPI? a. a random sample of all goods and services produced in the economy b. the goods and services that are typically bought by consumers as determined by government surveys
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c. only food, clothing, transportation, entertainment, and education d. the least expensive and the most expensive goods and services in each major category of consumer expenditures 8. The steps involved in calculating the consumer price index, in order, are as follows: a. Choose a base year, fix the basket, compute the inflation rate, compute the basket's cost, and compute the index. b. Choose a base year, find the prices, fix the basket, compute the basket's cost, and compute the index. c. Fix the basket, find the prices, compute the basket's cost, choose a base year and compute the index. d. Fix the basket, find the prices, compute the inflation rate, choose a base year and compute the index. Table 24-4 The table below pertains to an economy with only two goods -- books and calculators. The fixed basket consists of 5 books and 10 calculators. Year
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macro sheflin hwk 7 - hw7 Multiple Choice Identify the...

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