91影视

Table 9.4 shows the fruit prices that the typical college student purchased from 2001 to 2004. What is the amount spent each year on the 鈥渂asket鈥� of fruit with the quantities shown in column 2?

A fixed-rate mortgage has the same interest rate over the life of the loan, whether the mortgage is for 15 or 30 years. By contrast, an adjustable-rate mortgage changes with market interest rates over the life of the mortgage. If inflation falls unexpectedly by 3%, what would likely happen to a homeowner with an adjustable-rate mortgage?

What is the difference between the price level and

the rate of inflation?

Why does 鈥渟ubstitution bias鈥� arise if we calculate

the inflation rate based on a fixed basket of goods?

Why does the 鈥渜uality/new goods bias鈥� arise if we

calculate the inflation rate based on a fixed basket of goods?

Over the last century, during what periods were the

U.S. inflation rate highest and lowest?

What is deflation?

Construct the price index for a 鈥渇ruit basket鈥� in each year using 2003 as the base year.

22. Inflation rates, like most statistics, are imperfect

measures. Can you identify some ways that the inflation rate for fruit does not perfectly capture the rising price of fruit?

Given the federal budget deficit in recent years,

some economists have argued that by adjusting Social Security payments for inflation using the CPI, Social Security is overpaying recipients. What is their argument, and do you agree or disagree with it?