)(5 points) Snoopy mentions that cookies are 49 cents referring to the price of
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Question
)(5 points) Snoopy mentions that cookies are 49 cents referring to the price of cookies back in August of 1972.Using the CPI data below, calculate what the real price of cookies, in terms of 1982-1984 dollars (this is in base period prices). Use link https://fred.stlouisfed.org/series/CPIAUCSL b)(5 points)
Now do the same exercise as above, but instead of using the CPI price index, use the Personal Consumption Expenditure price index (below). That is, what is the real price of cookies now using the PCE price index? Why it so different than your answer in part a) above? Use link https://fred.stlouisfed.org/series/PCEPI
c)(5 points) Using the CPI and the most recent data, what would the price of cookies need to be now to equal the same real price as 49 cents was in August 1972? Please take answer to 2 decimal places.
d) (5 points) Use the MW link below to answer d) and e) What is the rate of inflation between 1974 and 1975? (please take the inflation rate to two decimals) Click Here for data on the MW: https://www.infoplease.com/business-finance/labor-and-employment/annual-federal-minimum-wage-rates-1955-2015
e) (5 points) What would the nominal minimum wage have to be in 2015 to equal the real purchasing power of the minimum wage in 1975? Use the two links below to answer question f) https://fred.stlouisfed.org/series/AHETPI https://fred.stlouisfed.org/series/CPIAUCSL#0
f)(5 points) Calculate the percent change in nominal wages between July 2017 and July 2018 and compare to the percent change in the CPI (aka inflation) over the same period. Which is larger and is this good news for workers? Explain. Pleas show all work.
g)(10 points) Now calculate the percent change in the real wage in 2 ways: first, take the real wage in July of 2017 and then the real wage in July 2018 and take the percent change (this is the most accurate) and then second – use the approximation of the percent change in the real wage by taking the %W and subtracting the %P. Please show all work.
h)(5 points) (show all work) This Andy Capp comic is recent (8/18) and Chalkie is telling Andy he can't afford to buy him ale anymore since the price of ale went up. Suppose we have the following original conditions: Chalkie's wage is $12 per hour and ale cost $3 a glass. Suppose the price of ale per glass rises to $3.50 per glass. What is the raise needed for Chalkie to have the same purchasing power, in terms of ale, as the original conditions. Compare the percent change in ale to the percent change in Chalkie's original wage.
Explanation / Answer
1) An index of 239.2 represents a 239.2 percent change.=b) False
2)The Paasche index method uses the base year quantities as weights.= a) True
3) This index method uses a nonweight method. = c) Simple aggregate
4 )Which index has the advantage of maintaining an up-to-date consumption pattern?= d) Fisher's
5)The Bureau of the Census reported that the farm population dropped from 30.5 million in 1940 to 6.5 million in 1999. What is the index for 1999 based on 1940? =6.5/30.5*100= c) 21.3
6) The CPI for "educational books and supplies" in June of 2006 was 386.7 (1982-1984 = 100). Interpret this index.=25*386.7/100=96.68 so. d) If the average price of a textbook in 1982-1984 was $25.00, the CPI for "educational books and supplies" would predict that the price of the textbook in June 2006 would be $96.68.
7) Suppose your annual 2005 salary was $95,000 and your 2010 salary was $125,000. Assume the annual CPI rose from 177.1 to 215.9 during this period of time. What was your real income in 2010? WRITE YOUR ANSWER AS A WHOLE NUMBER ROUNDED TO THE NEAREST DOLLAR, WITHOUT DOLLAR SIGN OR COMMAS
215.9/177.1*95000=115813
8)The Consumer Price Index (1982-84 = 100) reports a CPI in August 2010 for new and used motor vehicles as 97.620. What is the percentage change in the price of new and used motor vehicle compared to the base?. b) Decreased by 2.38 percent.
9) In 2000, an executive earned $100,000. In 2010, the executive earned $125,000. The CPI in 2000 was 172.2; the CPI in 2009 was 214.537. Using the CPI base, 1982-1984 = 100, what was the increase in real income from 2000 to 2009? Write your answer as a whole number, no dollar signs, no commas
=((214.537/172.2)-1)*1000000=24586
1) In a linear trend equation, t is a coded value that corresponds with a time period in a time series.= a) True
2)A typical seasonal index of 103.7 for January indicates that sales for January are below the annual average. =b) False
3)In the linear trend equation, what variable represents the Y-intercept?= a) a
4) If the least squares equation for sales data going from 2004 to 2008 is %u0176 = 10 + 1.3 t (in $millions), what is the value of t and the forecast for 2010? a) t = 6, Y-hat = 17.8
5)Which one of the following is not a component of a time series? = d) irregular variation
6) Given the trend equation, %u0176 = 25 + 0.6t (base year = 2006), what would be the forecast value for 2010?=25+5*0.6=28 b)28
7) What time series component was exemplified during the 1980's when the American economy enjoyed a period of prosperity? = c) irregular
8)To calculate monthly typical seasonal indexes, after computing the ratio-to-moving averages, the averages must be: b) summed and divided by 12
9)The forecast for the third quarter is 1,000 units; the seasonal index for the quarter is 0.85. What are the seasonally adjusted sales for the quarter? =1000*0.85=850 so b) 850
10) For the third quarter, the sales are 2,500 units; the seasonal index for the quarter is 1.20. What are the deseasonalized sales for the quarter? =2500/1.2=2083 soc) 2083
1) A scatter plot is a useful graphical method to determine if a set of sample data is from a normal population. =a) True
2)To test the null hypothesis that a set of sample data is normally distributed, we compare an expected normal distribution of the data to an observed distribution of the data.= b) False
3)What is the decision regarding the differences between the observed and expected frequencies if the critical value of chi-square is 9.488 and the computed value is 6.079?= a) Not due to chance; reject the null hypothesis
4) For any chi-square goodness-of-fit problem, the number of degrees of freedom is found by= a) k-1
5) Three new colors have been proposed for the Jeep Grand Cherokee vehicle. They are silvered-blue, almond, and willow green. The null hypothesis for a goodness-of-fit test would be =a) that there is no preference between the colors.
6)The computed chi-square value is positive because the difference between the observed and expected frequencies is=b) squared
7) A recent study of the relationship between social activity and education showed the following results. Based on the analysis, what can be concluded?
=as no results are given we can only say= d) No conclusion is possible.
8) A survey of the opinions of property owners about a street widening project was taken to determine whether the resulting opinion was related to the distance from the street. A randomly selected sample of 100 property owners was contacted and the results are shown below. What is the expected frequency for people who are undecided about the project and have property front-footage between 45 and 120 feet?= can not be say because results are not given
9) A grouped frequency distribution has a mean of 100 and a standard deviation of 20. The class limits for one class are 50 up to 60. Based on the normal distribution, what is the probability that an observation would be in this class? =p(z=-2)-p(z=-2.5)=0.0166
so b) 0.0166
10) To determine if a set of ungrouped, raw data is normally distributed, we can use =d) A chi-square test
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