Question

♡ has a la r ing the Canadian Consumer Price of change in the price level of a fixed basket of consumer goods and hed by an urban Canadian family over a period of time. h ey were som in the Plia tobacco and alcohol the most heal e d in the CPI baskets transportation sed to call the inflation rate The most h y weighted hem in the CPI basket is theher T 2. Zimbabwe had one of the worst Intationary periods in world history. In November 2001. Inflation was estimated at 80.7 Bextillion percent (21 zaros). We call this crary inflation dengwon hyperinflation creeping into The Canadian government recently increased its expenditure on goods and services Starting from a position of long-run equilibrium, what affect does this event have on Canada's economy in the short run? Real GDP increases and the price levelse Real GOP decreases and the price level fals Real GDP increases and the price levels Real GOP decreases and the price level rises There is no change in the real GDP or the price level. 31. All of the following statements are true EXCEPT The Lucas wedge is stated to be larger than the Okun op the case is the door value of the accumulated gap between what real GOP per person would have been the 1960s growth rate had persisted and what real GDP per person turned out to be the Lucas wedge arises from the slowdown of productivity growth that began during the d. the Lucas de qualse GOP spotential GOP .. The Olun gaiss ed to be smaller than the Lucas wedge 32. Assume the reference base period is 2002. A consumer price index of 122 in 2018 means that 1970

Answer 1

28. Ans. c) The most heavily weighted item in the CPI basket is transportation.

The most heavily weighted item in the CPI basket is shelter.

29. Ans. d) hyperinflation

A very rate of inflation in Zimbabwe is hyperinflation.

30. Ans. a) Real GDP increases and the price level rises.

As the government spending increases, the overall GDP increases as there would be higher level of production and the price level rises.

31. Ans. c) The Lucas wedge arises from the slowdown of productivity growth that began during the 1970's.