Answer true or false for the following statements:
1. The purchasing power of the $20 bi...
Answer true or false for the following statements:
1. The purchasing power of the $20 bill increases over time due to inflation.
2. The inflation rate measures the percentage change in the price index.
3. The GDP deflator is used to calculate the inflation rate.
4. John’s wage increases from $200 per day in year Y to $260 per day in year Z. At the same time, the CPI increases from 100 to 142. John is better off in year Z because his real income is higher.
5. The average person spends about 42% of their income on housing.
6. If the price index increases from 120 to 130 then the inflation rate during the past year was 10%.
7. If your employer gives you a raise that is equal to the inflation rate, then your real salary will have increased.
8. The consumer price index is calculated as: (the cost of a basket of goods in the base year/the cost of the basket of goods in the current year) x 100.
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