Measuring the cost of living

The "basket" on which the CPI is based is composed of?

• products purchased by the typical consumer.

• consumer production.

• raw materials purchased by firms.

• total current production.

Problems in measuring the cost of living, except

• SUBSTITUTION BIAS

• INTRODUCTION OF NEWS GOODS

• UNMEASURED QUALITY CHANGES

• GOVERNMENT POLICY

after find the price when calculated CPI, the next step is

• fix the basket

• compute the basket cost

• compute the inflation rate

• choose a base year

What is Consumer Price Index?

• Measurement of available housing

• Measurement of salary

• Measurement of inflation

• Measurement of import/export

In a country, it is known that the CPI measured in January 2021 is 160,50

Meanwhile, the CPI measured in January 2020 was 120,50

what was the CPI inflation rate in january 2021?

• 33,2%

• 35,2%

• 32,2%

• 34,2%

A COLA automatically raises the wage when

• GDP increases

• Taxes increase

• The consumer price index increases

• The producer price index increases

In 1931,President Herbert Hoover was paid a salary of $75,000.Government statistics show a consumer price index of 15.2 for 1931 and 237 for 2015. President Hoover's 1931 salary was equivalent to a 2015 salary of about

• $1,238,487

• $1,169,408

• $16,080,001

• $1,057,894

The Consumer Price Index (CPI) is used to compare dollar amounts from different years by allowing to calculate the "real" value of money over time, essentially showing

• How much purchasing power a dollar had in one year compared to another

• Enabling to adjust for inflation

• Compare prices across different time periods

• All of the above are correct

Which of the following best describes the difference between nominal interest rates and real interest rates?

• Nominal interest rates are what banks charge, real interest is what borrowers pay

• Nominal interest is what you earn from a savings account; real interest is what the bank pays savings accounts

• Nominal interest rates are the rates that measures the cange in dollars,the real interest rates are corrected for inflation

• Nominal interest rates are ajusted for inflation, real interest rates are not ajusted for inflation

If the nominal interest rate is 8% and the real interest rate is 5,5%. The inflation rate is?

• 2,5%

• 0,45%

• 13,5%

• 2,5%