2.4 Consumer Price Index Practice & GDP Review

Assume that an economy produces just two goods, X and Y, as shown in the table above. If year 1 is the base year, the consumer price index for year 2 in this economy is

• 57.1

• 66.7

• 100

• 175

• 250

The consumer price index measures which of the following?

• The change over time of the weighted prices of a particular group of goods and services

• The change over time of the weighted wholesale price index

• The change over time of the difference between the gross domestic product deflator and the wholesale price index

• Inflation corrected for changes in the real gross domestic product

• Inflation corrected for changes in the wholesale price index

The consumer price index (CPI) measures the

• value of current gross domestic product in base-year dollars

• prices of all consumer goods and services produced in the economy

• prices of selected raw materials purchased by firms

• prices of a specific group of goods and services purchased by consumers

• prices of imports, but not exports

If CPI goes from 100 to 300 and your salary goes from $100,000 to $200,000, what happened to your purchasing power?

• Increase
• Decrease
• No change

If CPI last year was 177 and the CPI this year is 186, what is the rate of inflation?

• 8%
• 5%
• 6%

In calculating GDP of that sector, we know that the total value added of that sector is .......

• $3.5

• $10.0

• $15.5

• $31.0

Please calculate Nominal GDP in 2017...

• $6.7

• $5.1

• $8.4

• No answers are correct

What is the GDP Deflator in 2018?

• 100

• 123.45

• 125.37

• 127.35

Please calculate economic growth from the data above

• 37.13%

• 33.17%

• 30.37%

• 31.37%

A Chik-fil-A milkshake today costs $2.75.  The Camden location sold 5,000,000 this year.  In 1961, it cost $0.80 and they sold 2,000,000.  How do I find the nominal GDP for Chik-fil-A milkshakes in 1961?

• 2.75 x 5,000,000
• .80 x 2,000,000
• .80 x 5,000,000
• 2.75 x 2,000,000