ECO Chapter 24 Quiz MCQs

ScenarioUse the following information to answer questions 2-4.The National Film Association developed the Movie Price Index (MPI) in 1998 based upon the annual purchases of a typical moviegoer. Information on the market basket for the MPI and the prices for each of the goods in 1998, which is the base year, and in 2001 and 2002 is shown in the table below.2.) Calculate the cost of the market basket in 2001. You may need to use this answer for other parts of this problem. Either write your answer on a piece of scrap paper or use the navigation links at the bottom of the page to return to this page and see your answer.a.) $153 b.) $134 c.) $177 d.) $1803.) Calculate the Movie Price Index for 2001 using 1998 as the base year for the index. You may need to use this answer for other parts of this problem. Either write your answer on a piece of scrap paper or use the navigation links at the bottom of the page to return to this page and see your answer.a.) 123 b.) 100 c.) 141 d.) 89 e.) 1014.) Using the price indexes, calculate the inflation rate facing moviegoers between 2001 and 2002. You may need to use answers from previous parts of this problem. If you did not write your answers on a piece of scrap paper, use the navigation links at the bottom of the page to return to previous pages and see your answers.a.) 6.1% b.) 5.7% c.) 7.0% d.) 30.0%5.) In which year did buyers of six-month Treasury bills receive the highest real return on their investment? (If you want to use your graph to help answer this question, use the navigation links at the bottom of the page to return to the previous problem.)a.) 1974 b.) 1975 c.) 1976 d.) 1977 e.) 19788.) Calculate the cost of the market basket in 2001. (Enter your response as follows: If your answer is $1,000 then enter 1000)Answer: _______________9.) Calculate the price index for 2002. The cost of the market basket is $1,370 in the base year of 2000. (Round your answer to the nearest integer. For example: If your answer is 1.359 then enter 136)Answer: ___________________10.) Jack Barnes entered college in the year 2000. In 2002, Jack found that each of his teachers required students to have two notebooks. This means that Jack had to buy 20 notebooks for the year. Which of the following statements is true?a.) The CSPI underestimated the cost of living for Jack in 2002.b.) The CSPI overestimated the cost of living for Jack in 2002.c.) The CSPI accurately estimated the cost of living for Jack in 2002.