Chapter 7: Q3. (page 282)
What business problems might China’s untrustworthy numbers create?
The untrustworthy figures can mislead the business forecasts and decisions, ultimately causing losses.
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Consider Table 7-3 but suppose that the market basket is composed of 100 oranges, 50 grapefruit, and 200 lemons. How does this change the pre-frost and post-frost price indexes? Explain. Generalize your explanation to how the construction of the market basket affects the price index.
How do the three statistics that Li Keqiang cited fit into the three different ways to calculate GDP?
From 2010 to 2015, the price of electronic equipment fell dramatically and the price of housing rose dramatically. What are the implications of this in deciding whether to use 2010 or 2015 as the base year in calculating 2013 real GDP?
The consumer price index in the United States (base period 1982–1984) was 237.486 in 2015 and 242.821 in 2016. Calculate the inflation rate from 2015 to 2016.
Assume there are only two goods in the economy, french fries and onion rings. In 2015, 1,000,000 servings of french fries were sold at \(0.40 each and 800,000 servings of onion rings at \)0.60 each. From 2015 to 2016 the price of french fries rose by 25% and the servings sold fell by 10%; the price of onion rings fell by 15% and the servings sold rose by 5%.
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