曼昆经济学原理第五版答案英文ch23

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1、Chapter23—MEASURINGTHECOSTOFLIVING1123MEASURINGTHECOSTOFLIVINGWHAT’SNEW:TheIntheNewsboxon“Mr.IndexGoestoHollywood”hasbeenupdatedandisnowaCaseStudywithaWebsitereferencewherestudentscanobtaincontinuallyupdatedinformation.ThereisalsoanewIntheNewsboxon“AC

2、PIforSeniorCitizens.”LEARNINGOBJECTIVES:Bytheendofthischapter,studentsshouldunderstand:Øhowtheconsumerpriceindex(CPI)isconstructed.ØwhytheCPIisanimperfectmeasureofthecostofliving.ØhowtocomparetheCPIandtheGDPdeflatorasmeasuresoftheoverallpricelevel.Øho

3、wtouseapriceindextocomparedollarfiguresfromdifferenttimes.Øthedistinctionbetweenrealandnominalinterestrates.KEYPOINTS:1.Theconsumerpriceindexshowsthecostofabasketofgoodsandservicesrelativetothecostofthesamebasketinthebaseyear.Theindexisusedtomeasureth

4、eoveralllevelofpricesintheeconomy.Thepercentagechangeinthepricelevelmeasurestheinflationrate.2.Theconsumerpriceindexisanimperfectmeasureofthecostoflivingforthreereasons.First,itdoesnottakeintoaccountconsumers’abilitytosubstitutetowardgoodsthatbecomere

5、lativelycheaperovertime.Second,itdoesnottakeintoaccountincreasesinthepurchasingpowerofadollarduetotheintroductionofnewgoods.Third,itisdistortedbyunmeasuredchangesinthequalityofgoodsandservices.Becauseofthesemeasurementproblems,theCPIoverstatesannualin

6、flationbyabout1percentagepoint.3.AlthoughtheGDPdeflatoralsomeasurestheoveralllevelofpricesintheeconomy,itdiffersfromtheconsumerpriceindexbecauseitincludesgoodsandservicesproducedratherthangoodsandservicesconsumed.Asaresult,importedgoodsaffecttheconsum

7、erpriceindexbutnottheGDPdeflator.Inaddition,whiletheconsumerpriceindexusesafixedbasketofHarcourt,Inc.itemsandderiveditemscopyrightÓ2001byHarcourt,Inc.Chapter23—MEASURINGTHECOSTOFLIVING11goods,theGDPdeflatorautomaticallychangesthegroupofgoodsandservice

8、sovertimeasthecompositionofGDPchanges.1.Dollarfiguresfromdifferentpointsintimedonotrepresentavalidcomparisonofpurchasingpower.Tocompareadollarfigurefromthepasttoadollarfiguretoday,theolderfigureshouldbeinflatedusingapriceindex.2.Variouslawsand