34 which of these changes in the price index produces

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Essentials of Economics
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Chapter 20 / Exercise 4
Essentials of Economics
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____ 34. Which of these changes in the price index produces the greatest rate of inflation: 100 to 110, 150 to 165, or 180 to 198? a. 100 to 110 b. 150 to 165 c. 180 to 198 d. All three changes show the same rate of inflation.
____ 35. If the cost of medical care increases by 50 percent, then, other things the same, the CPI is likely to increase by about
____ 36. Suppose that in 2006, the producer price index increases by 2 percent. As a result, economists most likely will predict that
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Essentials of Economics
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Chapter 20 / Exercise 4
Essentials of Economics
Mankiw
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____ 37. Which of the following is not a widely acknowledged problem with the CPI as a measure of the cost of living?
____ 38. Laura bought word-processing software in 2005 for $50. Laura's twin brother, Laurence, buys an upgrade of the same software in 2006 for $50. What problem in the construction of the CPI does this situation best represent? a. substitution bias b. unmeasured quality change c. introduction of new goods d. income bias
____ 39. In the United States, if the price of imported oil rises so that the price of gasoline and heating oil rise the
____ 40. The price of imported olives produced by a U.S. company operating in Spain increases. By itself, what effect will this price increase have on the GDP deflator and on the CPI?
____ 41. Suppose the CPI was 108 in 1967, and suppose one must spend $936 today to obtain the same basket of goods and services that could be bought for $200 in 1967. Then today’s CPI is
____ 42. Thomas earned a salary of $50,000 in 2001 and $70,000 in 2006. The consumer price index was 177 for 2001 and 265.5 for 2006. Thomas's 2001 salary in 2006 dollars is a. $33,333.33. b. $56,666.67. c. $75,000.00. d. $105,000.00.

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