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Inflation and Purchasing Power Answers

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Atlanta, GA has a CPI of 168. Seattle, WA has a CPI of 204. How does the purchasing power of an Atlanta resident earning a $32,800 salary compare to the purchasing power of a Seattle resident earning a $46,400 salary?a.The Atlanta resident has $34.46/CPI more than the Seattle resident.b.The Atlanta resident has $83.20/CPI more than the Seattle resident.c.The Seattle resident has $48.74/CPI more than the Atlanta resident.d.The Seattle resident has $32.21/CPI more than the Atlanta resident.

A
Option
B
Option
C
Option
D
Option
2
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Which of the following is not considered when calculating a country’s GDP?

A
goods produced by government agencies or commissions
B
goods produced in the country by people who are not citizens
C
services produced in the country
D
goods produced by citizens of the country who are currently overseas
3

The CPI is currently 153. If a coffee maker costs $31.90 today, how much did one cost in 1983, to the nearest cent?

A
$20.85
B
$21.20
C
$26.60
D
$48.81
4

In 1983, a cast-iron pan cost $28.35. Today, a cast-iron pan costs $52.95. If the CPI is 166, what is the percent relation of the actual price of a cast-iron pan to the expected price?a.The actual price is 11.1% lower than the expected price.b.The actual price is 20.8% lower than the expected price.c.The actual price is 31.5% higher than the expected price.d.The actual price is 12.5% higher than the expected price.

A
Option
B
Option
C
Option
D
Option
5

Item

A
Option
B
Option
C
Option
D
Option
6

What is inflation?

A
unemployment and the subsequent loss of production
B
a slow, steady raise in average wages
C
an increase in taxes
D
a devaluing of money, resulting in a loss of purchasing power
7

In 1983, a microwave oven cost $78.75. Today, a microwave oven costs $92.66. If the CPI is 177, what is the relation of the actual price of a microwave oven to the expected price, to the nearest cent?

A
The actual price is $46.73 lower than the expected price.
B
The actual price is $5.59 lower than the expected price.
C
The actual price is $13.91 higher than the expected price.
D
The actual price is $71.35 higher than the expected price.
8

A raincoat costs $79.25 today. If a similar raincoat cost $52.48 in 1983, what is the CPI?

A
166
B
151
C
132
D
127
9

A bicycle helmet cost $41.40 in 1983. What will a bicycle helmet cost when the CPI is 186? Round to the nearest cent.

A
$222.58
B
$144.60
C
$77.00
D
$72.30
10

The prices of consumer goods do not always exactly follow the CPI. The following chart shows several consumer items, along with their respective prices in 1983 and today.ItemPrice in 1983 ($)Current Price ($)Shower curtain8.8515.66Floor rug71.25119.75T-shirt13.9523.99Oscillating fan22.7537.50Using the prices shown on this chart, which of the following is a reasonable estimate of the current CPI?

A
164
B
170
C
185
D
199
11

In 1983, a cast-iron pan cost $28.35. Today, a cast-iron pan costs $52.95. If the CPI is 166, what is the percent relation of the actual price of a cast-iron pan to the expected price?

A
The actual price is 11.1% lower than the expected price.
B
The actual price is 20.8% lower than the expected price.
C
The actual price is 31.5% higher than the expected price.
D
The actual price is 12.5% higher than the expected price.
12

Sofa pillows cost $26.80 each when the CPI is 159. In 1983, how many sofa pillows could you buy with $125?

A
four
B
six
C
seven
D
eight
13

Atlanta, GA has a CPI of 168. Seattle, WA has a CPI of 204. How does the purchasing power of an Atlanta resident earning a $32,800 salary compare to the purchasing power of a Seattle resident earning a $46,400 salary?

A
The Atlanta resident has $34.46/CPI more than the Seattle resident.
B
The Atlanta resident has $83.20/CPI more than the Seattle resident.
C
The Seattle resident has $48.74/CPI more than the Atlanta resident.
D
The Seattle resident has $32.21/CPI more than the Atlanta resident.

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