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Business, 06.05.2020 02:13 bgallman153p71edg
A small nation of 10 people idolizes the TV show The Voice. All they produce and consume are karaoke machines and CDs, in the following amounts:
Karaoke Machines CDs
Quantity Price Quantity Price
(Dollars) (Dollars)
2017 20 50 60 5
2018 21 70 80 6
Required:
1) Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is . (Note: Use 2017 as the base year, and fix the basket at 2 karaoke machine and 6 CDs.)
2) Using a method similar to that used to calculate the GDP deflator, the percentage change of the overall price level is .
3) Which of the following statements is correct? Check all that apply.
a. The CPI holds the basket of goods and services constant.
b. The GDP deflator allows the basket of goods and services to change.
c. The inflation rate in 2018 is not the same using the two methods.
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Answers: 2
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A small nation of 10 people idolizes the TV show The Voice. All they produce and consume are karaoke...
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