hw #8

both the GDP deflator and the consumer price index.

An increase in the price of dairy products produced domestically will be reflected in

when a new good is introduced, it gives consumers greater choice, thus reducing the amount they must spend to maintain their standard of living.

Because the CPI is based on a fixed basket of goods, the introduction of new goods and services in the economy causes the CPI to overestimate the cost of living. This is so because

$40.00 purchased in 1975.

If the CPI was 90 in 1975 and is 225 today, then $100 today purchases the same amount of goods and services as

the consumer price index and the GDP deflator will both increase.

If the price of domestically produced power tools increases, then

how much consumers buy of each good or service.

In the CPI, goods and services are weighted according to

Fix the basket, find the prices, compute the basket's cost, choose a base year and compute the index, and compute the inflation rate.

The steps involved in calculating the consumer price index and the inflation rate, in order, are as follows:

introduction of new goods

To which of the problems in the construction of the CPI is the invention of pocket-sized computers most relevant?

$1,083.33

the CPI was 96 in 1982, and the CPI was 208 in 2010. How much money would you have needed in 2010 in order to buy what you could have bought with $500 in 1982?