Suppose the Value of the CPI Is 1

question 72

Multiple Choice

Suppose the value of the CPI is 1.100 in year one, 1.122 in year two, and 1.133 in year three.Assume also that the price of computers increases by 3% between year one and year two, and by another 3% between year two and year three.The price level is increasing, the inflation rate is _______, and the relative price of computers is _________.

• A)decreasing; increasing
• B)increasing; increasing
• C)decreasing; decreasing
• D)increasing; decreasing

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Definitions:

Hatfield

Likely refers to a location or surname, but within an economic context, it doesn't have a specific definition unless related to a study, model, or economic principle authored by someone named Hatfield.

Transitive Ordering

A principle in decision-making that if option A is preferred over B, and B is preferred over C, then A is preferred over C.

Willingness To Pay

The maximum amount of money a consumer is prepared to spend to obtain a good or service.

Communications Network

A system of interconnected devices or nodes that can communicate with each other to exchange data and information.