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Principles of Macroeconomics
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Chapter 11 / Exercise 2
Principles of Macroeconomics
Mankiw
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Unformatted text preview: Unit​ ​3:​ ​CPI​ ​Webquest Please​ ​complete​ ​the​ ​following​ ​webquest.​ ​Once​ ​you​ ​have​ ​finished…​ ​please​ ​submit​ ​to​ ​the​ U ​ nit​ ​3:​ ​CPI dropbox. Part​ ​#1:​ ​Answer​ ​the​ ​following​ ​questions​ ​using​ ​this​ ​Web​ ​site: 1.​ ​List​ ​five​ ​goods​ ​and​ ​services​ ​that​ ​consumer​ ​price​ ​index​ ​(CPI)​ ​covers. 1. FOOD​ ​AND​ ​BEVERAGES​ ​(breakfast​ ​cereal,​ ​milk,​ ​coffee,​ ​chicken,​ ​wine,​ ​full​ ​service​ ​meals,​ ​snacks) 2. HOUSING​ ​(rent​ ​of​ ​primary​ ​residence,​ ​owners'​ ​equivalent​ ​rent,​ ​fuel​ ​oil,​ ​bedroom​ ​furniture) 3. APPAREL​ ​(men's​ ​shirts​ ​and​ ​sweaters,​ ​women's​ ​dresses,​ ​jewelry) 4. TRANSPORTATION​ ​(new​ ​vehicles,​ ​airline​ ​fares,​ ​gasoline,​ ​motor​ ​vehicle​ ​insurance) 5. MEDICAL​ ​CARE​ ​(prescription​ ​drugs​ ​and​ ​medical​ ​supplies,​ ​physicians'​ ​services,​ ​eyeglasses​ ​and​ ​eye care,​ ​hospital​ ​services) 2.​ ​List​ ​two​ ​things​ ​that​ ​are​ ​not​ ​included​ ​in​ ​the​ ​consumer​ ​price​ ​index​ ​(CPI). 1. stocks​ ​and​ ​bonds 2. Real​ ​Estate​ ​,​ ​Life​ ​Insurance Part​ ​#2:​ ​Answer​ ​the​ ​following​ ​question​ ​using​ ​this​ ​Web​ ​site. 3.​ ​In​ ​your​ ​own​ ​words​ ​explain​ ​the​ ​quantity​ ​theory​ ​of​ ​money. This​ ​is​ ​a​ ​theory​ ​about​ ​the​ ​demand​ ​for​ ​money​ ​in​ ​an​ ​economy. MV=PT Answer​ ​the​ ​following​ ​question​ ​using​ ​this​ ​Web​ ​site. . swf&lid=615 4.​ ​In​ ​your​ ​own​ ​words​ ​explain​ ​the​ ​cost-push​ ​theory​ ​of​ ​inflation. Cost-push​ ​inflation​ ​happens​ ​when​ ​costs​ ​increase​ ​independently​ ​of​ ​aggregate​ ​demand. Answer​ ​the​ ​following​ ​question​ ​using​ ​this​ ​Web​ ​site. 5.​ ​In​ ​your​ ​own​ ​words​ ​explain​ ​the​ ​demand-pull​ ​theory​ ​of​ ​inflation. Demand-pull​ ​inflation​ ​happens​ ​where​ ​there​ ​is​ ​‘too​ ​much​ ​money​ ​chasing​ ​too​ ​few​ ​goods.’​ ​Excessive growth​ ​in​ ​demand​ ​literally​ ​pulls​ ​prices​ ​up. ...
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