Exam 2- BBL 1/A

Lakukan tugas rumah & ujian kamu dengan baik sekarang menggunakan Quizwiz!

Real GDP is

the value of total production linked back to the pries of a single year

Fishers mean

type of price index theory averages the base year and current year's quantity

The CPI is a measure o the average of the prices paid by_ for a fixed basket of consumer goods and services

urban consumers

If the CPI basket cost of goods cost $200 in the reference base period and $450 in a later year the CPI in the later year equals

225

Which type of price index theory uses base year's quantities

Laspeyres

Which type of price index theory uses current year quantities?

Paashe

Suppose the CPI last year is 121 and this year is 137. The correct method to calculate the inflation rate is

[(137-121)/121] X 100

An example of "investment" in computing real GDP using the expenditure approach is the purchase of

a new set of tools by an auto mechanic, for use in repairing cars

Deflation represents

a reduction in the aggregate price level

The CPI

compares the cost fo the typical basket of goods consumed in period 1 to the cost ofa basket of goods typically consumed in period 2

As currently calculated, the CPI tends to overstate true inflation rate because

it fails to correctly measure quality changes for some products

Because of the biases in calculating the CPI actual inflation is

less than the measured inflation rate by about 1 percent per year.

The biases in the CPI include the

new goods, quality change, and substitution biases

Price index can overstate inflation because they

omit some quality improvements

Suppose the CPI index is 143.6 what does this mean

prices rose 43.6 percent over the reference base period on average

The current used method for calculating the CPI

probably overstates inflation by about 1 percentage point

Substitution bias in the CPI refers to the fact that the CPI

takes no account of the substation of goods by consumers when relative prices change

Looking at inflation rates in the United States since 1970's we see that

the 1970's experienced the highest inflation rates


Set pelajaran terkait

Art 105 TEST 1 MINDTAP QUIZ QUESTIONS ch. 1-4

View Set

CPCU 520 3rd Edition - Chapter 4 - The Underwriting Function

View Set

Fundamentals:Skills Nursing Application: Vital Signs

View Set

A&P 1 Lecture Homework #7 Skin #1 (CHAPTER 5)

View Set

Chapter 4: Information Security Policy

View Set

Trigonometric Identities - Algebra II

View Set

Management 300 Exam 2 Chapters 5-9

View Set