Understanding CPI and Inflation

Understanding CPI and Inflation

Assessment

Interactive Video

1st Grade - University

Medium

Created by

Aiden Montgomery

Used 1+ times

FREE Resource

The video tutorial explains the Consumer Price Index (CPI) and its role in measuring the cost of a typical basket of goods in Jacksonia. It provides a step-by-step guide to calculating the CPI for 2015 and 2017 using 2016 as the base year, and determining the inflation rates between these years. The tutorial also discusses why the inflation rate might overstate changes in the cost of living due to the substitution effect, where consumers may alter their purchasing habits based on price changes.

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10 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does the Consumer Price Index (CPI) measure?

The cost of a typical basket of goods

The average income of households

The total population of a country

The employment rate in a nation

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which items are included in the typical basket of goods in Jacksonia?

Clothing, electronics, and furniture

Fruits, vegetables, and meat

Milk, eggs, and bread

Bread, cream cheese, and books

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How much does the weekly basket cost in 2015?

$93

$186

$100

$230

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the cost of the weekly basket in 2016?

$100

$230

$186

$93

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How is the CPI calculated for a given year?

Number of goods sold divided by number of goods produced, times 100

Cost of basket in the year divided by cost in base year, times 100

Total population divided by number of households, times 100

Total income divided by total expenses, times 100

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the CPI for 2017 using 2016 as the base year?

200

124

100

50

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the rate of inflation between 2015 and 2016?

50%

24%

100%

0%

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