QUESTION 4 Suppose you are told that the price of pears in the second period is actually 0.5. Using this information calculate the rate of inflation using the consumption basket for the first period. The answer is O Zero inflation O 25 percent inflation O 6 percent inflation O Minus 6 percent deflation O None of the above QUESTION 5 gnoring quality change generally leads to an O Overstatement of inflation * O An understatement of inflation O Has no impact on measured inflation O There is not enough information to answer this question Will lead to deflation

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Chapter24: Measuring The Cost Of Living
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QUESTION 4
Suppose you are told that the price of pears in the second period is actually 0.5. Using this information calculate the rate of
inflation using the consumption basket for the first period. The answer is
O Zero inflation
O 25 percent inflation
O 6 percent inflation
O Minus 6 percent deflation
O None of the above
QUESTION 5
gnoring quality change generaly leads to an
O Overstatement of inflation *
O An understatement of inflation
O Has no impact on measured inflation
O There is not enough information to answer this question
Will lead to deflation
Transcribed Image Text:QUESTION 4 Suppose you are told that the price of pears in the second period is actually 0.5. Using this information calculate the rate of inflation using the consumption basket for the first period. The answer is O Zero inflation O 25 percent inflation O 6 percent inflation O Minus 6 percent deflation O None of the above QUESTION 5 gnoring quality change generaly leads to an O Overstatement of inflation * O An understatement of inflation O Has no impact on measured inflation O There is not enough information to answer this question Will lead to deflation
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