Macroeconomic Test Bank 10 PDF

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Chapter 11/Measuring the Cost of Living  301Chapter 11Measuring the Cost of LivingMULTIPLE CHOICE Babe Ruth, the famous baseball player, earned $80,000 in 1931. Today, the best baseball players can earn 200 times as much as Babe Ruth in 1931. However, prices have also risen since 1931. We can concl...

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Chapter 11/Measuring the Cost of Living  301

Cha pt er11 Me as ur i ngt heCos tofLi vi ng MULTI PLECHOI CE 1 .

Ba beRut h, t hef a mousba s e ba l lpl a y er , e ar ne d$ 80 , 00 0i n1 9 31 .T oda y , t hebe s tba s e ba l lpl a y er sc a ne a r n2 0 0t i mesas muc ha sBabeRut hi n1 9 31 .Ho we v e r ,pr i c e sha vea l s or i s e ns i nc e1 9 31 .Wec anc onc l udet ha t a .t hebe s tba s e bal lpl a ye r st oda ya r ea bout2 0 0t i me sbet t e rofft ha nBabeRut hwasi n1 9 31 . b .be c a us epr i c eshav ea l s or i s e n,t hes t a ndar dofl i vi ngofba s e ba l ls t a r sha s n’ tc ha ng e ds i nc e1 93 1 . c . onec annotma kej udgme nt saboutc hange si nt hes t anda r dofl i vi ngbas edonc ha nge si npr i c e sa ndc hange si n i nc omes . d.onec a nnotde t er mi newhe t herbas e bal ls t ar st oda ye nj oyahi ghe rs t anda r dofl i vi ngt hanBa beRut hdi di n1 9 31 wi t houta ddi t i onali nf or ma t i onr e gar di ngi nc r e as e si npr i c e ss i nc e1 93 1 . ANS WER:d. onec a nnotde t e r mi newhe t he rba s e bal ls t ar st oda ye nj oyahi ghe rs t a nda r dofl i vi ngt ha nBa beRut hdi d i n1 9 31wi t houta ddi t i onali nf or ma t i onr e ga r di ngi nc r e as esi npr i c ess i nc e19 3 1. TYPE: M DI FFI CULTY:1SECTI ON:1 1 . 0 2 .

Whent hec ons ume rpr i c ei ndexr i s e s ,t het ypi c alf ami l y a .ha st os pendmor edol l a r st omai nt a i nt hes ames t andar dofl i vi ng. b .c a ns pe ndf e we rdol l a r st oma i nt a i nt hes a mes t anda r dofl i vi ng. c . findst ha ti t ss t a ndar dofl i vi ngi sno ta ffe c t e d. d.c a noffs ett hee ffec t sofr i s i ngpr i c esbys a vi ngmor e . ANS WER:a . ha st os pe ndmor edol l a r st oma i nt ai nt hes a mes t a ndar dofl i vi ng. TYPE: M DI FFI CULTY:1SECTI ON:1 1. 0 3 .

Thec ons ume rpr i c ei nde xi sus e dt o a .t r a c kc ha nge si nt hel e ve lofwhol e s a l epr i c e si nt hee c onomy . b .moni t orc ha ng esi nt hec os tofl i vi ng. c . moni t orc ha ng esi nt hel e ve lofr e a lGDP . d.t r a c kc ha nge si nt hes t oc kma r ke t . ANS WER:b . moni t orc ha ng e si nt hec os tofl i vi ng. TYPE: M DI FFI CULTY:1SECTI ON:1 1. 0 4 .

Thet e r m “i nfla t i on”i sus e dt ode s c r i beas i t ua t i oni nwhi c h a .t heove r a l ll e ve lofpr i c e si nt heec onomyi si nc r e a s i ng . b .i nc ome si nt hee c onomyar ei nc r e a s i ng. c .s t oc k ma r ke tpr i c e sa r er i s i ng. d.t hee c onomyi sgr owi ngr a pi dl y . ANS WER:a . t heove r a l ll e ve lofpr i c e si nt heec onomyi si nc r e as i ng. TYPE: M DI FFI CULTY:1SECTI ON:1 1. 0 5 .

Whe nt heov e r a l ll e ve lofpr i c e si nt hee c onomyi si nc r e a s i ng,wes a yt ha tt heec onomyi se x pe r i e nc i ng a .e c onomi cgr owt h. b .i nfla t i on. c . une mpl oyme nt . d.de fla t i on. ANS WER:b . i nfla t i on. TYPE: M DI FFI CULTY:1SECTI ON:1 1. 0 6 .

Thei nfla t i onr a t ei sde fine da st he a . pr i c el e ve l . b .c hangei nt hepr i c el e ve l . c . pr i c el e ve ldi vi de dbyt hepr i c el e ve li nt hepr e vi ouspe r i od. d.per c e nt a gec ha ngei nt hepr i c el e v e lf r om t hepr e vi ouspe r i od. ANS WER:d. t hepe r c e nt a gec hangei nt hepr i c el e ve lf r om t hepr e vi ouspe r i od. TYPE: M DI FFI CULTY:1SECTI ON:1 1. 0

302  Chapter 11/Measuring the Cost of Living 7 .

TheCPIi same a s ur eoft heov e r a l lc os tof a .i nput spur c ha s e dbyat ypi c alpr oduc e r . b .goodsands e r vi c e sboughtbyat ypi c alc ons ume r . c . goodsands e r vi c e spr oduc e di nt hee c onomy . d.s t oc ksont heNe w Yor kS t oc kEx c ha nge . ANS WER:b . goodsa nds e r vi c e sboughtbyat ypi c alc ons ume r . TYPE: M DI FFI CULTY:1SECTI ON:1 1. 1 8 .

Whi c hoft hef ol l owi nga ge nc i e sc al c ul a t e st heCPI ? a .t heNa t i ona lPr i c eBoa r d b .t heDe pa r t me ntOfWe i ghta ndMe a s ur eme nt s c .t heBur e auofLa borSt a t i s t i c s d.t heCongr e s s i onalBudge tOffic e ANS WER:c . t heBur e auofLa borSt a t i s t i c s TYPE: M DI FFI CULTY:1SECTI ON:1 1. 1 9 .

TheCPIi sc a l c ul a t e d a . wee kl y . b .mont hl y . c . qua r t e r l y . d.ye ar l y . ANS WER:b . mont hl y . TYPE: M DI FFI CULTY:1SECTI ON:1 1. 1 1 0 . Wha ti st heba s ke tofgoodsus edt oc ons t r uc tt heCPI ? a . ar a ndom s a mpl eofal lgoodsa nds e r vi c e spr oduc e di nt hee c onomy b .t hegoodsa nds e r vi c e st ypi c al l yboughtbyc ons ume r s , a c c or di ngt oBur e auofLa borS t a t i s t i c ss ur v e ys c . goodsands e r vi c e swe i ght e dbyt her a t i oofe xpe ndi t ur e sont he mr e l a t i vet ot hec ons umpt i onc ompone ntof GDP d.t hel e as tandt hemos te x pe ns i vegoodsa nds e r vi c e si ne ac hma j orc a t e gor yofc ons ume re xpendi t ur e s ANS WER:b . t hegoodsa nds e r vi c e st ypi c al l yboughtbyc ons ume r s , ac c or di ngt oBur e a uofLa borSt a t i s t i c ss ur v e ys TYPE: M DI FFI CULTY:1SECTI ON:1 1. 1 1 1 . Whi c hgoodsa r es uppos e dt obei nc l ude di nt heCPI ? a . al lgoodsa nds e r vi c e spr oduc e di nt hee c onomy b .al lgoodsa nds e r vi c e st ha tt ypi c alc ons ume r sbuy c . al lgoodsa nds e r vi c e si nt hec ons umpt i onc ompone ntoft heGDPa c c ount s d.a l lt hegoods ,butnott hes e r vi c e s ,i nt hec ons umpt i onc ompone ntoft heGDPac c ount s ANS WER:b . a l lgoodsands e r vi c e st ha tt ypi c a lc ons ume r sbuy TYPE: M DI FFI CULTY:1SECTI ON:1 1. 1 1 2 . I nt heCPI ,goodsands e r vi c e sa r ewe i ght e da c c or di ngt o a . ho w muc hc ons ume r sbuyofe ac hi t e m. b .whe t he rt hegoodsa nds e r vi c e sar ene c e s s i t i e sorl uxur i e s . c .t hel e ve l sofpr oduc t i onoft hegoodsa nds e r vi c e si nt hedome s t i ce c onomy . d.byt hee x pe ndi t ur e sont he mi nt heGDPna t i ona li nc omea c c ount s . ANS WER:a . ho w muc hc ons ume r sbuyofe a c hi t e m. TYPE: M DI FFI CULTY:1SECTI ON:1 1. 1 1 3 . How a r et hewe i ght sont heva r i ousgoodsands e r vi c e si nt heCPIbas ke tde t e r mi ne d? a . Al lgoodsands e r vi c e sa r ewe i ght edequa l l y . b .A s ur v e yi sc onduc t e dt odet e r mi neho w muc hofe a c hgoodands e r vi c et ypi c a lc ons ume r spur c ha s e . c .t hewe i ght se qua lt her a t i oofe xpe ndi t ur e sone ac hgoodors er vi c edi vi de dbyt het ot a lc ons umpt i on e xpe ndi t ur e si nt heGDPac c ount s . d.Eac hgooda nds e r vi c ei swe i ght e da c c or di ngt oi t spr i c e . ANS WER:b . As ur ve yi sc onduc t e dt odet e r mi neho w muc hofe a c hgoodands e r vi c et ypi c a lc ons ume r spur c has e . TYPE: M DI FFI CULTY:1SECTI ON:1 1. 1

Chapter 11/Measuring the Cost of Living  303 1 4 . Thes t e psi nv ol v e di nc a l c ul a t i ngt hec ons ume rpr i c ei nde xi nc l ude , i nor de r : a .c hoos eaba s eye a r ,fixt heba s ke t ,c omput et hei nfla t i onr a t e , c omput et hebas ke t ’ sc os t ,andc omput et hei nde x. b .c hoos eaba s eye a r ,findt hepr i c e s , fixt heba s ke t ,c omput et heba s ke t ’ sc os t ,a ndc omput et hei nde x . c . fixt heba s ke t ,findt hepr i c e s ,c omput et heba s ke t ’ sc os t ,c hoos eabas eye a ra ndc omput et hei nde x . d.fixt heba s ke t ,findt hepr i c e s ,c omput et hei nfla t i onr a t e ,c hoos eaba s eye a ra ndc omput et hei nde x . ANS WER:c . fixt heba s ke t ,findt hepr i c e s ,c omput et heba s ke t ’ sc os t ,c hoos eaba s eye a r ,andc omput et hei nde x. TYPE: M DI FFI CULTY:1SECTI ON:1 1. 1 Us et het a bl ebe l ow t oa ns we rt hef ol l owi ngt woque s t i ons . y e a r 2 00 0 2 00 1

pe a c he s $1 1pe rbus he l $9pe rbus he l

pec ans $ 6pe rbus he l $ 10pe rbus he l

1 5 . Suppos et ha tt het ypi c a lc ons ume rba s ke tc ons i s t sof1 0bus he l sofpe ac he sa nd15bus he l sofpe c a nsandt ha tt he bas eye a ri s2 00 0 .Wha ti st hec ons ume rpr i c ei nde xf or2 00 1 ? a . 10 0 b .12 0 c .2 00 d.2 40 ANS WER:b . 1 20 TYPE: M DI FFI CULTY:2SECTI ON:1 1. 1 1 6 . Wha twa st hei nfla t i onr a t ei n20 0 1? a . 20pe r c e nt b .16 . 7pe r c e nt c . 10pe r c e nt d.8pe r c e nt ANS WER:a . 20pe r c e nt TYPE: M DI FFI CULTY:2SECTI ON:1 1. 1 Us et het a bl ebe l ow t oa ns we rt hef ol l owi ngt woque s t i ons . y e a r 2 00 3 2 00 4

pr i c eofpor k $ 2 0 $ 2 0

pr i c eofc or n $ 20 $ 30

1 7 . Suppos et ha tt heba s ke tofgoodsi nt heCPIc ons i s t e dof3uni t sofpor ka nd2uni t sofc or n. Wha ti st hec ons ume r pr i c ei nde xf or20 0 4i ft heba s eye ari s2 00 3 ? a . 10 0 b .10 5 c .1 15 d.1 20 ANS WER:d. 12 0 TYPE: M DI FFI CULTY:2SECTI ON:1 1. 1 1 8 . Suppos et ha tt heba s ke tofgoodsi nt heCPIc ons i s t e dof3uni t sofpor ka nd2uni t sofc or n. Wha ti st hei nfla t i onr a t e f or2 00 4 ? a . 33 . 3pe r c e nt b .25pe r c e nt c . 20pe r c e nt d.1 5per c e nt ANS WER:c . 2 0pe r c e nt TYPE: M DI FFI CULTY:2SECTI ON:1 1. 1

304  Chapter 11/Measuring the Cost of Living 1 9 . Thema r ke tba s ke tus e dt oc a l c ul a t et heCPIi nAqui l oni ai s4l oa ve sofbr e ad, 6ga l l onsofmi l k,2s hi r t sa nd2pa nt s . I n20 0 1br e a dc os t$1 . 00pe rl oa f ,mi l kc os t$1 . 5 0pe rga l l on, s hi r t sc os t$6 . 00e a c ha ndpa nt sc os t$ 10 . 00pe rpa i r .I n 2 0 02br e a dc o s t$ 1 . 5 0pe rl oa f ,mi l kc os t$ 2. 0 0pe rga l l on,s hi r t sc os t$ 7 . 00e a c ha ndpa nt sc os t$1 2 . 0 0pe rpa i r .Wha t wa st hei nfla t i onr a t e ,a sme a s ur e dbyt heCPI , f orAqui l oni abet we en2 00 1a nd2 00 2 ? a . 30pe r c e nt b .24 . 4pe r c e nt c . 21 . 6pe r c e nt d.I ti si mpos s i bl et ode t e r mi newi t houtknowi ngt heba s eye a r . ANS WER:b . 2 4. 4pe r c e nt TYPE: M DI FFI CULTY: 3SECTI ON:1 1 . 1 Us et hef ol l owi ngi nf or ma t i ont oa ns we rt hene xtf ourque s t i ons . I nt hec ount r yofS he m,t heCPIi sc a l c ul a t e dus i ngama r ke tba s ke tc ons i s t i ngof5a ppl e s ,4l oa ve sofbr e a d,3r obe sand2 gal l onsofga s ol i ne .Thepe r uni tpr i c e soft hes egoodsha vebe e na sf ol l ows : Ye a r 1 9 99 2 0 00 2 0 01 2 0 02

Appl es $ 1 . 0 0 $ 1 . 0 0 $ 2 . 0 0 $ 3 . 0 0

Br e ad $2 . 00 $1 . 50 $2 . 00 $3 . 00

Ro be s $ 10 . 00 $ 9. 0 0 $ 11 . 00 $ 15 . 00

Ga s ol i ne $ 1 . 0 0 $ 1 . 5 0 $ 2 . 0 0 $ 2 . 5 0

2 0 . Wha twa st hei nfla t i onr a t e , a sme a s ur e dbyt heCPI , bet we en1 99 9a nd2 00 0 ? a . –8 . 89pe r c e nt b .–7 . 14pe r c e nt c . 3. 7 5pe r c e nt d.I ti si mpos s i bl et ode t e r mi newi t houtknowi ngt heba s eye a r . ANS WER:a . –8 . 89pe r c e nt TYPE: M DI FFI CULTY: 3SECTI ON:1 1 . 1 2 1 . Wha twa st hei nfla t i onr a t e , a sme a s ur e dbyt heCPI , bet we en2 00 0a nd2 00 1 ? a . 28 . 5pe r c e nt b .34 . 2pe r c e nt c . 47pe r c e nt d.I ti si mpos s i bl et ode t e r mi newi t houtknowi ngt heba s eye a r . ANS WER:b . 3 4. 2pe r c e nt TYPE: M DI FFI CULTY: 3SECTI ON:1 1 . 1 2 2 . Wha twa st hei nfla t i onr a t e , a sme a s ur e dbyt heCPI , bet we en2 00 1a nd2 00 2 ? a . 40pe r c e nt b .40 . 25pe r c e nt c . 46 . 46pe r c e nt d.I ti si mpos s i bl et ode t e r mi newi t houtknowi ngt heba s eye a r . ANS WER:a . 40pe r c e nt TYPE: M DI FFI CULTY: 3SECTI ON:1 1 . 1 2 3 . Fort heCPI ,t heba s ey e ari s a .t hebe nc hma r ka ga i ns twhi c hot he rye a r sa r ec ompa r e d,a ndi tc ha nge se ac hye ar . b .t hebe nc hma r ka ga i ns twhi c hot he rye a r sa r ec ompa r e d,a ndi tc ha nge soc c a s i onal l y . c .t heye a rt heCPIfir s ta ppe a r e d. d.a l wa ys1 9 89 . ANS WER:b . t hebe nc hma r ka gai ns twhi c hot he rye a r sar ec ompa r e d,a ndi tc ha ng esoc c a s i ona l l y . TYPE: M DI FFI CULTY:1SECTI ON:1 1. 1 2 4 . Fora nygi v enye a r ,t heCPIi st hepr i c eoft heba s ke tofgoodsa nds e r vi c e si nt he a . gi ve nye a rdi vi de dbyt hepr i c eoft heba s ke ti nt heba s eye ar ,t he nmul t i pl i e dby1 0 0. b .gi ve nye a rdi vi de dbyt hepr i c eoft heba s ke ti nt hepr e vi ousye a r ,t he nmul t i pl i e dby1 0 0 . c . ba s eye ardi vi de db yt hepr i c eoft heba s ke ti nt hegi v e nye a r ,t he nmul t i pl i e dby1 00 . d.pr e vi ousy e a rdi vi de dbyt hepr i c eoft heba s ke ti nt hegi ve nye a r ,t he nmul t i pl i e dby1 0 0 . ANS WER:a . gi ve nye a rdi vi de dbyt hepr i c eoft heba s ke ti nt hebas eye ar ,t he nmul t i pl i e dby1 0 0. TYPE: M DI FFI CULTY:2SECTI ON:1 1. 1

Chapter 11/Measuring the Cost of Living  305 2 5 . Thei nfla t i onr a t ei sc a l c ul a t e d a .f r om as ur ve yofc ons ume rs pe ndi ng . b .bya ddi ngupt hepr i c ei nc r e a s e sofa l lgoodsa nds e r vi c e s . c . byc omput i ngas i mpl ea ve r a geoft hepr i c ei nc r e a s ei nal lgoodsands e r vi c es . d.byde t e r mi ni ngt hepe r c e nt a gei nc r e a s ei nt hepr i c ei nde xf r om t hepr e c e di ngpe r i od. ANS WER:d. byde t e r mi ni ngt hepe r c e nt a gei nc r e as ei nt hepr i c ei nde xf r om t hepr e c e di ngpe r i od. TYPE: M DI FFI CULTY:1SECTI ON:1 1. 1 2 6 . I ft hi sy e art heCPIi s12 5a ndl a s tye a ri twa s1 20 ,t he nweknow t ha t a . al lgoodsha vebe c omemor ee x pe ns i ve . b .t hepr i c el e v e lha si nc r e a s e d. c .t hei nfla t i onr a t eha si nc r e as e d. d.Al loft hea bo vea r ec or r e c t . ANS WER:b .

t hepr i c el e v e lhasi nc r e a s e d.

TYPE: M DI FFI CULTY:1SECTI ON:1 1. 1 2 7 . I ft hec ons ume rpr i c ei nde xwa s1 0 0i nt heba s eye a ra nd1 07t hef ol l owi ngye ar ,t hei nfla t i onr a t ewa s a . 10 7pe r c e nt . b .10 . 7pe r c e nt . c . 7pe r c e nt . d.Noneoft hea bov ea r ec or r e c t . ANS WER:c . 7pe r c e nt . TYPE: M DI FFI CULTY:1SECTI ON:1 1. 1 2 8 . I ft hepr i c ei nde xi nt hefir s tye a rwa s9 0,i nt hes e c ondye a rwa s1 0 0,andi nt het hi r dye arwas9 5 ,t hee c onomy e xpe r i e nc e d a . 10pe r c e nti nfla t i onbe t wee nt hefir s ta nds e c ondye a r sand5pe r c e nti nfla t i onbe t wee nt hes e c onda ndt hi r d y e a r s . b .10pe r c e nti nfla t i onbe t wee nt hefir s ta nds e c ondye a r sand5pe r c e ntde fla t i onbe t wee nt hes e c onda ndt hi r d y e a r s . c . 11pe r c e nti nfla t i onbe t wee nt hefir s ta nds e c ondye a r sand5pe r c e nti nfla t i onbe t wee nt hes e c onda ndt hi r d y e a r s . d.1 1per c e nti nfla t i onbe t we e nt hefir s tands e c ondye ar sa nd5pe r c e ntde fla t i onbe t we ent hes e c onda ndt hi r d y e a r s . ANS WER:d. 11pe r c e nti nfla t i onbe t we e nt hefir s ta nds e c ondye a r sand5pe r c e ntde fla t i onbe t we e nt hes e c ondand t hi r dy e a r s . TYPE: M DI FFI CULTY:2SECTI ON:1 1. 1 2 9 . Thepr i c ei nde xi nt hefir s tye a ri s10 0 ,i nt hes ec ondye a ri s9 0,a ndi nt het hi r dye ari s8 0.Wha ti st hedefla t i onr a t e be t we e nt hefir s ta nds e c ondy e a r ,a ndbe t we e nt hes ec ondandt hi r dye a r ? a . 11pe r c e ntbe t we e nt hefir s ta nds e c ondye ar ,1 1pe r c e ntbe t we ent hes e c onda ndt hi r dy e a r b .11pe r c e ntbe t we e nt hefir s ta nds e c ondye ar ,1 2pe r c e ntbe t we ent hes e c onda ndt hi r dy e a r c . 10pe r c e ntbe t we e nt hefir s ta nds e c ondye ar ,1 1pe r c e ntbe t we ent hes e c onda ndt hi r dy e a r d.1 0per c e ntbe t we e nt hefir s ta nds e c ondye ar ,12pe r c e ntbe t we e nt hes e c onda ndt hi r dye ar ANS WER:c . 1 0pe r c e ntbe t wee nt hefir s ta nds e c ondye ar ,1 1pe r c e ntbe t we ent hes e c onda ndt hi r dye ar TYPE: M DI FFI CULTY:2SECTI ON:1 1. 1 3 0 . Thepr i c ei nde xi nt hefir s tye a ri s12 5 ,i nt hes ec ondye a ri s1 50 ,a ndi nt het hi r dye a ri s20 0 .Wha ti st hei nfla t i onr a t e be t we e nt hefir s ta nds e c ondy e a ra ndbe t wee nt hes e c onda ndt hi r dye ar ? a . 20pe r c e ntbe t we e nt hefir s ta nds e c ondye ar ,3 3pe r c e ntbe t we ent hes e c onda ndt hi r dy e a r b .25pe r c e ntbe t we e nt hefir s ta nds e c ondye ar ,7 5pe r c e ntbe t we ent hes e c onda ndt hi r dy e a r c . 25pe r c e ntbe t we e nt hefir s ta nds e c ondye ar ,5 0pe r c e ntbe t we ent hes e c onda ndt hi r dy e a r d.5 0per c e ntbe t we e nt hefir s ta nds e c ondye ar ,10 0pe r c e ntbe t we e nt hes e c onda ndt hi r dye a r ANS WER:a . 20pe r c e ntbe t we e nt hefir s ta nds e c ondye a r ,33pe r c e ntbe t we e nt hes e c onda ndt hi r dy e a r TYPE: TFDI FFI CULTY:2SECTI ON:1 1. 1

306  Chapter 11/Measuring the Cost of Living 3 1 . Whi c hc ha ngei nt hepr i c ei nde xs howst hegr e a t e s tr a t eofi nfla t i on:1 0 0t o1 1 0,15 0t o16 5 ,or1 80t o1 98 ? a . 10 0t o11 0 b .15 0t o16 5 c . 18 0t o19 8 d.Al lc ha ng e ss ho wt hes a mer a t eofi nfla t i on. ANS WER:d. Al lc ha nge ss how t hes a mer a t eofi nfla t i on. TYPE: M DI FFI CULTY:2SECTI ON:1 1. 1 3 2 . Whi c hc ha ngei nt hepr i c ei nde xs howst hegr e a t e s tr a t eofi nfla t i on:8 0t o10 0 ,1 00t o1 20 ,or1 5 0t o1 7 0? a . 80t o1 00 b .10 0t o12 0 c . 15 0t o17 0 d.Al lc ha ng e ss ho wt hes a mer a t eofi nfla t i on. ANS WER:a . 80t o10 0 TYPE: M DI FFI CULTY:2SECTI ON:1 1. 1 3 3 . Fr om Oc t obe r20 0 1t oOc t obe r2 00 2t heCPIi nCa nadar os ef r om 1 16 . 5t o1 1 9. 8 . I nMe xi c oi tr os ef r om 97 . 2t o10 2 . 3 . Wha twe r et hei nfla t i onr a t e sf orCa nadaa ndMe xi c o? a . 3. 3pe r c e nta nd6. 7pe r c e nt b .3. 3pe r c e nta nd5. 1pe r c e nt c . 2. 8pe r c e nta nd6. 7pe r c e nt d.2 . 8pe r c e nta nd5. 2pe r c e nt ANS WER:b . 3 . 3pe r c e ntand5 . 1pe r c e nt TYPE: M DI FFI CULTY:2SECTI ON:1 1. 1 3 4 . Thepr i c ei nde xi n2 00 1i s12 0 ,a ndi n20 0 2t hepr i c ei nde xi s1 27 . 2.Wha ti st hei nfla t i onr a t e ? a . 5pe r c e nt b .6pe r c e nt c . 8pe r c e nt d.Thei nfla t i onr a t ei si mpos s i bl et ode t e r mi newi t houtknowi ngt hebas ey e a r . ANS WER:b . 6pe r c e nt TYPE: M DI FFI CULTY:2SECTI ON:1 1. 1 3 5 . Thepr i c ei nde xi s3 20i noneye a ra nd36 0i nt hene xt .Wha twa st hei nfla t i onr a t e ? a . 6. 7pe r c e nt b .8pe r c e nt c . 11 . 1pe r c e nt d.1 2. 5pe r c e nt ANS WER:d. 12 . 5pe r c e nt TYPE: M DI FFI CULTY:2SECTI ON:1 1. 1 3 6 . Thepr i c ei nde xi s2 70i noneye a ra nd30 0i nt hene xt .Wha twa st hei nfla t i onr a t e ? a . 9. 3pe r c e nt b .10pe r c e nt c . 11 . 1pe r c e nt d.Noneoft hea bov ea r ec or r e c t . ANS WER:c . 1 1. 1pe r c e nt TYPE: M DI FFI CULTY:2SECTI ON:1 1. 1 3 7 . Thepr i c ei nde xi s1 80i noneye a ra nd21 0i nt hene xt .Wha twa st hei nfla t i onr a t e ? a . 16 . 7pe r c e nt b .14 . 3pe r c e nt c . 11 . 1pe r c e nt d.Noneoft hea bov ea r ec or r e c t . ANS WER:a . 16 . 7pe r c e nt TYPE: M DI FFI CULTY:2SECTI ON:1 1. 1

Chapter 11/Measuring the Cost of Living  307 3 8 . Ani nfla t i onr a t ec a l c ul a t e dus i ngt heCPIs ho wst her a t eofc hang eof a . al lpr i c e s . b .t hepr i c e sofal lfinalgoodsa nds e r vi c e s . c .t hepr i c e sofal lc ons ume rgoods . d.t hepr i c e sofs omec ons ume rgoods . ANS WER:d. t hepr i c e sofs omec ons ume rgoods . TYPE: M DI FFI CULTY:3SECTI ON:1 1. 1 3 9 . Fr om 2 00 0t o2 0 01t heCPIf orme di c a lc ar er os ef r om 2 60 . 8t o2 7 2 . 8.Wha twa st hei nfla t i onr a t ef orme di c a lc a r e ? a . 12pe r c e nt b .11 . 1pe r c e nt c . 4. 9pe r c e nt d.4 . 6pe r c e nt ANS WER:d. 4. 6pe r c e nt TYPE: M DI FFI CULTY:2SECTI ON:1 1. 1 Fort hene x tt woque s t i onsc ons i de rt het a bl ebe l o w.

Fooda ndBe ve r a ge s Hous i ng Tr ans por t a t i on

20 0 0 1 6 8. 4 16 9 . 6 15 3 . 3

2 00 1 1 7 3. 6 17 6 . 2 1 5 4. 3

4 0 . Amongt he s ec a t e gor i e s ,wha twa st hehi ghe s tr a t eofi nfla t i on? a . 6. 6pe r c e nt b .5. 2pe r c e nt c . 3. 9pe r c e nt d.3 . 1pe r c e nt ANS WER:c . 3 . 9pe r c e nt TYPE: M DI FFI CULTY:2SECTI ON:1 1. 1 4 1 . Oft hos ec a t e gor i e s , whi c honehadt hehi ghe s ti nc r e as eandwhi c honeha dt hel owe s tr a t eofi nfla t i on? a . Fooda ndBe ve r a ge s , Hous i ng b .Fooda ndBe ve r a ge s , Tr a ns por t a t i on c . Hous i ng,Fooda ndBe ve r a ge s d.Hous i ng,Tr a ns por t a t i on ANS WER:d. Hous i ng,Tr a ns por t a t i on TYPE: M DI FFI CULTY:2SECTI ON:1 1. 1 4 2 . Byf art hel ar ge s tc a t e gor yofgoodsa nds e r vi c e si nt heCPIbas ke ti s a . hous i ng . b .r e c r e a t i on. c .t r a ns por t a t i on. d.f oodandbe ve r a ge s . ANS WER:a . hous i ng . TYPE: TFDI FFI CULTY:2SECTI ON:1 1. 1 4 3 . Ca t e gor i e sofU. S .c ons ume rs pe ndi ng,r a nke df r om l a r ge s ...