【文章內(nèi)容簡(jiǎn)介】 , 10 racquets, 200 Gatorades2) Find the price of each good in each year:YearBallsRacquetsGatorade2001$2$40$12002$2$60$23) Compute the cost of the basket of goods in each year:2001: (100 x $2) + (10 x $40) + (200 x $1) = $8002002: (100 x $2) + (10 x $60) + (200 x $2) = $1,2004) Choose one year as a base year (2001) and pute the CPI in each year:2001: $800/$800 x 100 = 1002002: $1,200/$800 x 100 = 1505) Use the CPI to pute the inflation rate from the previous year:2002: (150 100)/100 x 100% = 50%b. Tennis racquets are less expensive relative to Gatorade, since their price rose 50 percent while the price of Gatorade rose 100 percent. The wellbeing of some people changes relative to the wellbeing of others. Those who purchase a lot of Gatorade bee worse off relative to those who purchase a lot of tennis racquets or tennis balls.2. To find the percentage change in the overall price level, follow these steps:a. Determine the fixed basket of goods: 100 heads of cauliflower, 50 bunches of broccoli, 500 carrots.b. Find the price of each good in each year:YearCauliflowerBroccoliCarrots2001$2$$2002$3$$c. Compute the cost of the basket of goods in each year:2001: (100 x $2) + (50 x $) + (500 x $.10) = $3252002: (100 x $3) + (50 x $) + (500 x $.20) = $475d. Choose one year as a base year (2001) and pute the CPI in each year:2001: $325/$325 x 100 = 1002002: $475/$325 x 100 = 146e. Use the CPI to pute the inflation rate from the previous year:2002: (146100)/100 x 100% = 46%3. Many answers are possible.4. a. Since the increase in cost was considered a quality improvement, there was no increase registered in the CPI.b. The argument in favor of this is that consumers are getting a better good than before, so the price increase equals the improvement in quality. The problem is that the increased cost might exceed the value of the improvement in air quality, so consumers are worse off. In this case, it would be better for the CPI to at least partially reflect the higher cost.5. a. introduction of new goods。 b. unmeasured quality change。 c. substitution bias。 d. unmeasured quality change。 e. substitution bias6. a. ($ $)/$ x 100% = 400%.b. ($ $)/$ x 100% = 324%.c. In 1970: $.15/($) = minutes. In 2000: $.75/($) = minutes.d. Workers39。 purchasing power fell in terms of newspapers.7. a. If the elderly consume the same market basket as other people, Social Security would provide the elderly with an improvement in their standard of living each year because the CPI overstates inflation and Social Security payments are tied to the CPI.b. Since the elderly consume more health care than younger people, and since health care costs have risen faster than overall inflation, it is possible that the elderly are worse off. To investigate this, you would need to put together a market basket for the elderly, which would have a higher weight on health care. You would then pare the rise in the cost of the elderly basket with that of the general basket for CPI.8. Many answers are possible. A mon answer may be that as students, they spend a greater proportion of their ine on tuition and books than the typical household. If the prices of tuition and books have risen faster than average prices, students face a higher inflation rate than the typical household.9. When bracket creep occurred, inflation increased people39。s nominal ines, pushing them into higher tax brackets, so they had to pay a higher proportion of their ines in taxes, even though they were not getting higher real ines. As a result, real tax revenue rose.10. In deciding how much ine to save for retirement, workers should consider the real interest rate, since they care about their purchasing power in the future, not the number of dollars they will have.11. a. When inflation is higher than was expected, the real interest rate is lower than expected. For example, suppose the market equilibrium has an expected real interest rate of 3 percent and people expect inflation to be 4 percent, so the nominal interest rate is 7 percent. If inflation turns out to be 5 percent, the real interest rate is 7 percent minus 5 percent equals 2 percent, which is less than the 3 percent that was expected.b. Since the real interest rate is lower than was expected, the lender loses and the borrower gains. The borrower is repaying the loan with dollars that are worth less than was expected.c. Homeowners in the 1970s who had fixedrate mortgages from the 1960s benefited from the unexpected inflation, while the banks that made the mortgage loans were harmed.25章SOLUTIONS TO TEXT PROBLEMS:Quick Quizzes1. The approximate growth rate of real GDP per person in the United States is percent (based on Table 1) from 1870 to 2000. Countries that have had faster growth include Japan, Brazil, Mexico, Canada, Germany, China, and Argentina。 countries that have had slower growth include India, Indonesia, United Kingdom, Pakistan, and Bangladesh.2. The four determinants of a country’s productivity are: (1) physical capital, which is the stock of equipment and structures that are used to produce goods and services。 (2) human capital, which is the knowledge and skills that workers acquire through education, training, and experience。 (3) natural resources, which are inputs into production that are provided by nature, such as land, rivers, and mineral deposits。 and (4) technological knowledge, which is society’s understanding of the best ways to produce goods and services.3. Ways in which a government policymaker can try to raise the growth in living standards in a society include: (1) investing more current resources in the production of capital, which has the drawback of reducing the resources used for producing current consumption。 (2) encouraging investment from abroad, which has th