ZuoTi.Pro
Question

Suppose vacuum cleaners are part of the market basket used to compute the CPI. Suppose also...

Suppose vacuum cleaners are part of the market basket used to compute the CPI. Suppose also that the quality of vacuum cleaners improves while the price of vacuum cleaners stays the same. If the Bureau of Statistics can precisely adjust the CPI for the improvement in quality, then, other things equal,

a.The CPI will fall

b.The CPI will stay the same.

c.Vacuum cleaners will no longer be included in the market basket.

d.The CPI will rise

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

When the quality of the cleaner is improving means the price of the cleaner also should increase but it is actually remaining same. It means that vacuum cleaner is getting cheaper. If CPI is adjusted for the quality, the CPI will fall as the price of the cleaner is less than the actual value it should have been given the quality.

Hence Option a is correct

0 0
Add a comment
Know the answer?
Add Answer to:
Suppose vacuum cleaners are part of the market basket used to compute the CPI. Suppose also...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Do all parts please. No explanation needed. Part 1: Most of the reduction in poverty rates...

    Do all parts please. No explanation needed. Part 1: Most of the reduction in poverty rates since World War II occurred as a result of the 1996 welfare reforms. 1940s War On Poverty. 1960s War On Poverty. end of "welfare as we know it." Part 2 Policies focused on putting people to work by having them construct parks would be considered demand-side policies. monetary policies. supply-side policies. demand-side and supply-side policies. Part 3 A 15-year old that wants a job...

  • Ante tolikowing Us Towy w Et Questo 39 Gradesh 1. The western component DD 2. An...

    Ante tolikowing Us Towy w Et Questo 39 Gradesh 1. The western component DD 2. An increase in real GDP of the UNE output of goods and services U 3. Economists use the termino debe overall production levels rising 4. Suppose that a borrower and and then on a loan. Then nation turns out to be the one that the real interest rate on this loans lower than 6. The catch-up effect is deed the property where rich more rapidly...

  • What an Executive Summary Is An executive summary is a specific type of document that does...

    What an Executive Summary Is An executive summary is a specific type of document that does two things: it summarizes a research article, and it offers recommendations as to how information from the article can be used. Some long reports can contain an executive summary section, as indicated in the Pearson handbook. Write a 2 pahe Executive Summary In business contexts, an executive summary is always written for a specific purpose: to explain the information in the article to a...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT