Imagine that you are given $1,000 to spend and told that you must spend it all buying items from a Sears catalog. But you do have a choice of catalog.

You may select from the 1903 catalog or from Sears.com today. You will pay the prices quoted in the catalog that you choose.

Which catalog will you choose and why? Refer to any biases in the CPI that might be relevant to your choice.

Use the following information to work Problems 9 and 10.

Brazil keeps interest rates on hold Brazil’s inflation rate climbed to 10.7 percent at the end of 2015 and the country’s Monetary Policy Committee kept its benchmark interest rate at 14.25 percent.

Source: The Financial Times, January 20, 2016