Inflation and Purchasing Power Answers

Which of the following factors are considered when calculating GDP?I. goods produced within a country by citizens of that countryII. goods produced within a country by residents who are not citizensIII. goods produced within a country for use in production of other goodsIV. goods produced by a country’s citizens outside of its bordersa.II and IIIb.I onlyc.I and IId.I, II, III, and IV

The prices of consumer goods do not always exactly follow the CPI. The following chart shows several consumer items, along with their respective prices in 1983 and today.ItemPrice in 1983 ($)Current Price ($)Pair of boots67.45126.85Hair dryer15.2529.95Box of tissues1.152.25Toaster22.8544.25Using the prices shown on this chart, which of the following is a reasonable estimate of the current CPI?a.208b.195c.180d.173

An end table costs $69.85 today. If the CPI is 194, what would an end table cost in 1983, to the nearest cent?a.$135.51b.$124.15c.$36.00d.$23.76

Which of the following is a cause of inflation?a.consumers growing apathetic and failing to notice attempts to raise pricesb.demand continually exceeding supply, leading to an imbalance of money and goods in the marketc.a natural consequence of the use of money instead of trade goodsd.government intervention demanding that prices be raised

Minneapolis, MN has a CPI of 173. Anchorage, AK has a CPI of 226. How does the purchasing power of someone in Minneapolis earning a salary of $42,500 compare to the purchasing power of someone in Anchorage earning a salary of $67,000?a.The person living in Minneapolis has $57.61/CPI more than the person in Anchorage.b.The person living in Minneapolis has $130.45/CPI more than the person in Anchorage.c.The person living in Anchorage has $50.80/CPI more than the person in Minneapolis.d.The person living in Anchorage has $90.82/CPI more than the person in Minneapolis.

Contrary to common belief, the price of a single item as listed in the CPI (Consumer Price Index) does not always rise and fall in tandem with the price of the same item in the PPI (Producer Price Index). Which of the following is not a reason that makes this so?a.Imports are excluded from PPI, but included in CPI.b.Taxes paid as part of the purchase are not included as part of the PPI but are included in the CPI.c.The PPI includes the prices of goods purchased by other producers while the CPI includes only the prices of goods purchased by consumers.d.Since the PPI measures the change of the price the producer receives for their product and the CPI measure the change of the price the consumer pays for the product, one should rise while the other will fall.

Which of the following is not one of the categories of which the CPI market basket consists?a.housingb.foodc.educationd.industry

A full-length mirror cost $144.99 when the CPI was 163. What will a full-length mirror cost when the CPI is 211, to the nearest cent?a.$305.93b.$214.59c.$187.68d.$88.95

In 1983, a winter hat cost $12.95. Today, a winter hat costs $24.50. If the CPI is 219, what is the percent relation of the actual price of a winter hat to the expected price?a.The actual price is 39.3% higher than the expected price.b.The actual price is 15.8% higher than the expected price.c.The actual price is 13.6% lower than the expected price.d.The actual price is 29.8% lower than the expected price.

Which of the following is a cause of inflation?a.consumers growing apathetic and failing to notice attempts to raise pricesb.demand continually exceeding supply, leading to an imbalance of money and goods in the marketc.a natural consequence of the use of money instead of trade goodsd.government intervention demanding that prices be raised

In 1983, a year-long newspaper subscription cost $12.75. Today, a year-long newspaper subscription costs $28.50. If the CPI is 193, what is the relation of the actual price of a year-long newspaper subscription to the expected price, to the nearest cent?a.The actual price is $14.79 higher than the expected price.b.The actual price is $3.89 higher than the expected price.c.The actual price is $9.20 lower than the expected price.d.The actual price is $11.86 lower than the expected price.

In 1983, a pair of jeans cost $66.35. If a pair of jeans costs $118.10 today, what is the CPI?a.152b.156c.178d.184

A bookcase costs $93.11 when the CPI is 191. What is the CPI when a bookcase costs $76.05?a.213b.181c.156d.122

An end table costs $69.85 today. If the CPI is 194, what would an end table cost in 1983, to the nearest cent?a.$135.51b.$124.15c.$36.00d.$23.76

When the CPI is 185, an electric razor cost $57.81. What is the difference between the price of an electric razor in 1983 and the cost of an electric razor when the CPI is 207, to the nearest cent? a. $33.44 b. $31.25 c. $26.56 d. $6.88 Please select the best answer from the choices provided

In 1983, a can of house paint cost $16.35. In 2000, a can of house paint cost $28.94, and in 2005, a can of house paint cost $32.54. What is the difference in CPI between 2000 and 2005?a.12b.22c.45d.77

The CPI in 1970 was 38.8. The CPI in 2007 was 207.3. The purchasing power of $50,000 in 1970 was _____ the purchasing power of $200,000 in 2007. a. less than b. more than c. the same as d. not comparable to Please select the best answer from the choices provided

Which of the following factors are considered when calculating GDP?I. goods produced within a country by citizens of that countryII. goods produced within a country by residents who are not citizensIII. goods produced within a country for use in production of other goodsIV. goods produced by a country’s citizens outside of its bordersa.II and IIIb.I onlyc.I and IId.I, II, III, and IV

A notebook costs $2.65 when the CPI is 182. In 1983, how many notebooks could you buy with $18?a.twentyb.fifteenc.twelved.six

Minneapolis, MN has a CPI of 173. Anchorage, AK has a CPI of 226. How does the purchasing power of someone in Minneapolis earning a salary of $42,500 compare to the purchasing power of someone in Anchorage earning a salary of $67,000?a.The person living in Minneapolis has $57.61/CPI more than the person in Anchorage.b.The person living in Minneapolis has $130.45/CPI more than the person in Anchorage.c.The person living in Anchorage has $50.80/CPI more than the person in Minneapolis.d.The person living in Anchorage has $90.82/CPI more than the person in Minneapolis.

In 1983, a hardcover dictionary cost $145.75. If the CPI is currently 209, what would a hardcover dictionary cost today? Round to the nearest cent.a.$354.75b.$304.62c.$254.75d.$209.00

A full-length mirror cost $144.99 when the CPI was 163. What will a full-length mirror cost when the CPI is 211, to the nearest cent?a.$305.93b.$214.59c.$187.68d.$88.95

A bookcase costs $93.11 when the CPI is 191. What is the CPI when a bookcase costs $76.05?a.213b.181c.156d.122

In 1983, a year-long newspaper subscription cost $12.75. Today, a year-long newspaper subscription costs $28.50. If the CPI is 193, what is the relation of the actual price of a year-long newspaper subscription to the expected price, to the nearest cent?a.The actual price is $14.79 higher than the expected price.b.The actual price is $3.89 higher than the expected price.c.The actual price is $9.20 lower than the expected price.d.The actual price is $11.86 lower than the expected price.

In 1983, a winter hat cost $12.95. Today, a winter hat costs $24.50. If the CPI is 219, what is the percent relation of the actual price of a winter hat to the expected price?a.The actual price is 39.3% higher than the expected price.b.The actual price is 15.8% higher than the expected price.c.The actual price is 13.6% lower than the expected price.d.The actual price is 29.8% lower than the expected price.