1. The price of a typical laptop computer has fallen from $2,000 in 1985 today. At the same time, the consumer price index has risen from 100 to 250. Adjusting for inflation, how much did the price of laptops change? Does this answer seem right to you, or is it missing something? Explain your response.

2. What three issues are at the center of the debate regarding the accuracy of the DPI? Please give an example of each issue.

3. If the price of homes go up by 5% and the prices of concert tickets rise by 10%, which will have the larger impact on the CPI? why?

4. If a country is experiencing a relatively high rate of inflation, what impact will this have on the country’s long-term rate of economic growth?

5. In a sentence or two, evaluate the accuracy of the following statement, including a clear and precise statement of historical comparison:

Inflation in the United States last year was 0%.

This is close to the historical level.

Answer rating: 100% (QA)

1 Inflation250100100 150 Change in the price of laptop 80020002000 12002000 60 There is something wrong in calculating the change in the price merely ... View the full answer