Using the 1989 base as a base, the price index for computers is now 125. What do

Question

Using the 1989 base as a base, the price index for computers is now 125. What does this index number mean? A. price of computers has decreased 25% since 1989 B. price of computers has increased 125% since 1989 C. price of computers has increased 25% since 1989 D. none of the above three answers are correct A _____ economic indicator is one whose changes lag behind or follow changes in the economy. A. Lagging B. Coincidence C. Leading Some criticisms of the CPI include all of the following except: A. the market basket used in the CPI may not reflect current spending priorities B. the CPI takes advantage of sale prices C. the CPI does not adjust for changes in quality D. the CPI does not measure prices for rural Americans The CPI's at the start of each decade from 1940 to 1990 were: What was the rate of inflation for the 1950's, as measured by the percentage change in the CPI? What was the rate of inflation for the 1960's, as measured by the percentage change in the CPI? Name the major category added for the market basket of goods and services in 1998? Tuition at University Z was $1100 per quarter in 1985 (CPI = 107.6). How much should tuition be in 2001 adjusted for inflation (CPI = 175.1)? 'Child care' is one of the eight major categories of goods and services in the market basket. The current 'base period' that we are on is 1982-1984.

Explanation / Answer

Solution:-

12) option C. price of computers has increased 25% since 1989

13) option A. Lagging

14) option B. the CPI takes advantage of sale prices

19) False

20) True

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