{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

CHAPTER 24 - Chapter24 1 a GDPdeflator b producerpriceindex...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 24/Measuring the Cost of Living 141 Chapter 24 Measuring the Cost of Living 1. Which price index measures the average price of things purchased by the typical family in an  urban area? a. GDP deflator b. producer price index c. consumer price index d. minimum wage ANSWER: c consumer price index SECTION: 1 OBJECTIVE: 1   2. Which item would receive the most weight in the consumer price index? 3. Which item would receive the least weight in the consumer price index? 4. The good that receives the most weight in the CPI is the good that 5. Which of the following is a reason why the Consumer Price Index (CPI) is not calculated as a  simple average of all prices? a. Some goods experience large price changes and the CPI would be too variable if computed by a  simple average. b. Goods differ in their importance in the average consumer’s budget. c. Some goods never experience price changes and the CPI would not be variable enough if  computed as a simple average. d. It would be difficult to compute a price index using a simple average of all prices. ANSWER: b Goods differ in their importance in the average consumer’s budget. SECTION: 1 OBJECTIVE: 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
142 Chapter 24/Measuring the Cost of Living 6. If the price of the market basket of goods in the base year of 1994 was $20,000 and the price of the  same basket had risen to $22,000 by 1998, the CPI for 1998 SECTION: 1 OBJECTIVE: 1
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}