If the price of a soda was 15 cents in 1970, when the CPI was 50, and 50 cents in 2007 when the CPI was 172, then the real price of
A) a soda has risen 567 percent.
B) a soda has risen 350 percent.
C) the 1970 soda in 2007 dollars is 52 cents.
D) the 2007 soda in 1970 dollars is $3.44.
E) the soda was 15 cents in 1970 and 50 cents in 2007.
C
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Referring to Figure 19.1, Mexican goods will become cheaper in the United States if the exchange rate goes from ________ to ________ pesos to the dollar
A) 13; 11 B) 13; 10 C) 12; 11 D) 12; 13
During the recession phase of the business cycle, households become pessimistic about their future earning capacity as do banks. Nominal interest rates fall during recessions. Mortgage lending could be expected to
A) rise if the change in future earnings is thought to be greater than the change in interest payments. B) stay the same. C) fall. D) fall if the change in future earnings is thought to be greater than the change in interest payments.