A ham and cheese sandwich at the local deli costs $4.99 in 2005. If the CPI in 2005 was 90.0 and the CPI today is 121.0, the equivalent price for the ham and cheese sandwich today is
A) $6.71. B) $5.29. C) $4.99. D) $6.04. E) $5.54.
A
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Use the following diagram to answer the next question.
The most likely cause of a shift of a production possibilities frontier of an economy AB to CD is
A. technological progress. B. allocative efficiency. C. a decrease in the price level. D. full employment of resources.
An increase in the price level in the United States will reduce imports and increase exports
Indicate whether the statement is true or false
A shortage means that the quantity demanded is greater than the quantity supplied at the prevailing price
a. True b. False Indicate whether the statement is true or false
Based on the CPI, how do we measure annual inflation?
a. We compute the total price of a fixed set ("market basket") of goods and services in a base year, such as 2003, and in a future year, such as 2004. b. We get CPI for 2004 by multiplying the 2004 total cost with the 2003 total cost, and divide by 100 . A similar calculation will yield the CPI value for 2003. c. We get CPI for 2004 by adding the CPI value for 2003 to the CPI value for 2004, and multiply by 100. d. We compute the total cost of a fixed set ("market basket") of goods and services in a base year, such as 2003, and in a future year, such as 2004.