Question #1

1. Given the following table, use year 1 as the base year Year1 product price quantity A $35 20 B $14 13 C $55 29 Year2 product price quantity A $42 21 B $12 40 C $57 23 Year3 product price quantity A $40 38 B $16 52 C $52 37 a) Construct the CPI for year 2 and year 3 Year 1 Year 2 Year 3 CPI in Year 1= CPI in Year 2= CPI in Year 3= b) Using CPI, determine who earns more money if James earned $65000 in year 2 and Janet earned $80000 in year 3. Janet James2. Multiple choice 2. Cost push inflation is a result of A) lower wages B) higher wages C) sticky wages D) inflexible wages E) none of the above 3. GNP is total income earned by A) foreigners B) importers C) Canadians living in Canada D) exporters E) Canadians living anywhere 6.Economists define investment to include: A) any increase in business inventories B) the addition of cash to a savings account C) the purchase of common or preferred stock D) the purchase of any durable good E) the purchase of any non-durable good 9.Real GDP measures: A) current output in current dollars B) current output in constant dollars from a given year C) GDP per person in current dollars D) GDP per person in constant dollars from a given year E) none of the above