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Question: 25 the technique used to calculate the cpi implicitly assumes...

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25) The technique used to calculate the CPI implicitly assumes that consumers buy A) the same relative quantities of goods as in a base year B) more computers and CD players and fewer black-and-white TVs. C) relatively less of goods with relative prices that are decreasing. D) goods and services whose quality improves at the rate of growth of real GDP E) relatively more of goods with relative prices that are increasing. 26) If there is a 5 percent increase in the CPI, then there will most likely be A) a less than 5 percent rise in the cost of living because of consumers substituting away from goods whose relative prices rise towards other goods. в) a 5 percent rise in the cost of living. C) a more than 5 percent rise in the cost of living because of consumers substituting away from goods whose relative prices rise towards other goods. D) a less than 5 percent rise in the cost of living because of falling quality of goods over time. E) a more than 5 percen t rise in the cost of living because of the introduction of new goods. 27) If the inflation rate is positive, the price level in an economy is A) rising. B) falling rapidly C) zero. D) falling slowly. E) constant 28) In China, suppose that the price level was 100 in 2007, 110 in 2008, 120 in 2009, and 130 in 2011. Over this time period, A) zero inflation occurred. B) the inflation rate increased. C) the inflation rate was positive. D) the inflation rate decreased. E) Both C and D are correct. 29) Hyperinflation is defined as A) very high inflation rates. B) rising but low inflation rates. C) an increase in the price level. D) declining inflation rates. E) very low inflation rates 30) The commodity substitution bias is that A) consumers substitute high-quality goods for low-quality goods B) consumers decrease the quantity they buy of goods whose relative prices rise and increase the quantity of goods whose relative price falls C) government spending is a good substitute for investment expenditures. D) consumers substitute more expensive goods for less expensive goods when technology advances. E) national saving and foreign borrowing are interchangeable.
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