ECON 1BB3 Study Guide - Baseball Stars, Word Processor, Nominal Interest Rate

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orchidmouse779

6 Apr 2014

School

McMaster University

Department

Economics

Course

ECON 1BB3

Professor

Bridget O' Shaughnessy

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ECON 1BB3 Full Course Notes

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Document Summary

Chapter 24 measuring the cost of living practice test. Identify the letter of the choice that best completes the statement or answers the question. Labor statistics surveys. the least expensive goods and services in each major category of consumer expenditures. d. 180: 80 to 96, 100 to 125, 150 to 180, all changes show the same rate of inflation. relatively _____ expensive. When prices change by differing amounts, consumers substitute _____ the goods that have become. The price index in the first year is 125, in the second year is 150, and in the third year is 200. Which change in the price index shows the greatest rate of inflation: 80 to 96, 100 to 125, or 150 to toward, more a: away from, more c, both b and c are correct. toward, less. Wally plowman earns ,000 from his farm operation in 1945. In 2005, wally"s grandson vern earns ,000 from the same farm.

Related Questions

What basket of goods and services is used to construct the CPI?

a. a random sample of all goods and services produced in the economy.
b. the goods and services that are typically bought by consumers as determined by government surveys.
c. only food, clothing, transportation, entertainment, and education.
d. the least expensive and the most expensive goods and services in each major category of consumer expenditures.

copperrabbit819

The US Bureau of Labor Statistics calculates inflation by taking samples of prices for a basket of goods and services a typical consumer would purchase. Each good and service is assigned a weight or percentage of income spent on that product. For example, cakes, cupcakes, and cookies are given a weight of 0.197. This means that about 0.2% of the average household spending is made on these items. Of course, an individual's spending may vary significantly from the hypothetical basket of goods and services. In this assignment, you will review the BLS's Relative importance of components in the Consumer Price Indexes and compare how your household spending measures up to the typical consumer's.

Part I

Consider these specific categories:

Category	CPI Weight	Your Budget
Health Insurance	0.5
Jewelry	0.3
Household Cleaning Supplies	0.4
Gasoline	4.9
Food Away from Home	5.9

How closely does your household spending correlate to the typical consumer's? Is it realistic that the typical household spends about as much on health insurance as it does on cleaning supplies? Should the Bureau of Labor Statistics adjust its CPI weights after the new federal health care mandate starts? What might this mandate do to inflation? In an economic contraction, what would you expect to happen to spend in each of these categories, if health insurance is mandated?

azurecrow98

The US Bureau of Labor Statistics calculates inflation by taking samples of prices for a 'basket of goods and services' a 'typical consumer' would purchase. Each good and service is assigned a 'weight' or the percentage of income spent on that product. For example, 'cakes, cupcakes, and cookies' are given a weight of 0.197. This means that about 0.2% of the 'average' household spending is made on these items. Of course, an individual's spending may vary significantly from the hypothetical basket of goods and services. In this assignment, you will review the BLS's Relative importance of components in the Consumer Price Indexes and compare how your household spending measures up to the typical consumers.

Part I

Considering your household budget, divide up your spending into these eight broad categories:

Category	CPI Weight	Your Budget
Food and beverages	14.8
Housing	41.5
Apparel	3.6
Transportation	17.3
Medical Care	6.6
Recreation	6.3
Education & Communication	6.4
Other	3.5
Total	100	100

How closely does your household spending correlate to the typical consumer? How might your household be disproportionately affected by a change in one of these broad categories? Do you believe that the government's weightings are an accurate approximation for the whole economy?

yellowpanda707

ECON 1BB3 Study Guide - Baseball Stars, Word Processor, Nominal Interest Rate

ECON 1BB3 Full Course Notes

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