For each of the following statements, determine if it is true of false. When real wages rise, we can conclude that the economy is experiencing a deflation. [Select] (b) If prices of 60 percent of the goods and services in the consumption basket increase and prices 40 percent of goods and services in the basket decrease, CPI will definitely go up. [Select] When GDP deflator rises, CPI may go up, go down or remain unchanged. [Select]
For each of the following statements, determine if it is true of false. When real wages rise, we can conclude that the economy is experiencing a deflation. [Select] (b) If prices of 60 percent of the goods and services in the consumption basket increase and prices 40 percent of goods and services in the basket decrease, CPI will definitely go up. [Select] When GDP deflator rises, CPI may go up, go down or remain unchanged. [Select]
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Measuring The Cost Of Living
Section: Chapter Questions
Problem 6PA
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Question 5
For each of the following statements, determine if it is true of false.
(a) When real wages rise, we can conclude that the economy is experiencing a deflation.
[Select]
(b) If prices of 60 percent of the goods and services in the consumption basket increase and prices of
40 percent of goods and services in the basket decrease, CPI will definitely go up.
[Select]
(c) When GDP deflator rises, CPI may go up, go down or remain unchanged.
[Select]
(d) When CPI falls, we can conclude that the economy is experiencing a deflation.
[Select]
(e) The weight of good A in the consumption basket is 20 percent. The weight of good B in the
consumption basket is 5 percent. If the price of good Arises by 10 percent and the price of good B
falls by 10 percent, CPI will rise if everything else remains the same. [Select]
f) When inflation occurs and nominal wages rise, real wages definitely fall.
[Select]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd0f30ebe-ccd3-4602-b95e-b2939d8e492f%2F7e01a790-45fc-4f4c-a0cf-166b224f93d0%2Fzx1dghi_processed.png&w=3840&q=75)
Transcribed Image Text:U
Question 5
For each of the following statements, determine if it is true of false.
(a) When real wages rise, we can conclude that the economy is experiencing a deflation.
[Select]
(b) If prices of 60 percent of the goods and services in the consumption basket increase and prices of
40 percent of goods and services in the basket decrease, CPI will definitely go up.
[Select]
(c) When GDP deflator rises, CPI may go up, go down or remain unchanged.
[Select]
(d) When CPI falls, we can conclude that the economy is experiencing a deflation.
[Select]
(e) The weight of good A in the consumption basket is 20 percent. The weight of good B in the
consumption basket is 5 percent. If the price of good Arises by 10 percent and the price of good B
falls by 10 percent, CPI will rise if everything else remains the same. [Select]
f) When inflation occurs and nominal wages rise, real wages definitely fall.
[Select]
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