ECN 204 Lecture Notes - Lecture 2: Price Level, Market Basket, Disposable And Discretionary Income

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coffeewildebeest588

19 Jan 2018

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Ecn204 lecture 2: chapter 7 gdp and cpi: unemployment and 2. These are the two principal macroeconomic problems. Price indexes and the aggregate price level: not a simple average. The aggregate price level is a measure of the overall level of prices in the economy. To measure the aggregate price level, economists calculate the cost of purchasing a. A price index is the ratio of the current cost of that market basket to the cost in a base market basket. Some goods count for more than others/ year, multiplied by 100: price index in a given year : The inflation rate is the yearly percentage change in a price index, typically based on the. Consumer price index, or cpi, the most common measure of the aggregate price level. The cpi measures the cost of the market basket of a typical canadian family. Total cpi is calculated with all the items in the market basket.

Related Questions

An advantage of the personal consumption expenditures price index (PCE) over the consumer price index (CPI) as a measure of inflation is that the PCE

A) includes the prices of consumer goods, but not consumer services.

B) includes the prices of consumer services, but not consumer goods.

C) includes the prices of more consumer goods and services.

D) is a fixed market-basket price index that does not allow the mix of products to change each year

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Which of the following statements is true about the consumer price index (cpi):

A.It measures cost of representative basket of goods at the level of first significant commercial transaction

B.It measure of the average prices paid by consumers for all goods and services

C.It is used to measure the standard of living in an economy

D.It measures the average prices paid by consumers for a fixed basket of goods services

E. None of the above

beigebee838

1. The peak of the business cycle

a. usually occurs when the natural rate of unemployment is equal to its actual rate.

b. is the point where an expansion ends and a recession begins

c. is the minimum level of nominal GDP.

2. The consumer price index (CPI) reflects

a. the median annual expenditures of a typical single family of four on consumer goods

b. the average price of all goods and services computed from the ratio of nominal GDP to real GDP.

c. the changes in the prices of goods and services typically purchased by consumers.

3. The Consumer Price Index is NOT used

a. to measure the average price level of all final goods and services produced

b. to compute the U.S. inflation rate.

c. to measure changes in the cost of living

4. Which of the following is true of a price index that uses a fixed market basket?

a. It excludes new goods and services

b. It accurately predicts the impact of rising prices when purchases are made at superstores.

c. It overstates the importance of items that fall in price.

5. A quality-change bias in the construction of the CPI arises because

a. big box stores that carry electronic goods routinely run sales to reduce their inventories before stocking new models.

b. consumers also shop at superstores or outlet stores

c. newer versions of a product might be more expensive but could also be better than the older version.

greydeer734

ECN 204 Lecture Notes - Lecture 2: Price Level, Market Basket, Disposable And Discretionary Income

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