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D Question 1 1 pts The Consumer Price Index (CPI) O is a price level O is the average of prices of all goods and services bought by a typical consumer O measures the prices of goods and services bought by producers O is an index of how much gasoline prices have increased, because all prices follow the price of gasoline. O is not a useful measure compared with GDP deflator. D Question 2 1 pts You are offered two jobs, one in Richmond, Virginia, paying $60,000, and one in San Diego, California, paying $80,000. The price index in Richmond is 105; in San Diego it is 130. If real wages are the only consideration, then you would O definitely take the job in Richmond because the real wage is higher there. definitely take the job in San Diego because the real wage is higher there. O not be sure which job to take, because you do not have enough information to compare the real wages in the two cities.D Question 3 1 pts Suppose your nominal wage falls, this would imply that O your real wage would definitely rise if deflation occurs. O your real wage would fall if inflation occurs. O the overall price level has fallen more than your nominal wage. O deflation must have occurred. O your real wage would definitely fall because inflation always occurs. D Question 4 1 pts Consider the following statement "When housing prices increase, CPI will definitely increase." Is the above statement correct or not? Explain. O Yes, the statement is correct. CPI and housing prices can never move in opposite directions. Yes, the statement is correct. When housing prices rise, prices of other goods and services will definitely rise. O No, the statement is not correct. If the prices of other goods and services drop substantially, even though housing prices rise, CPI may fall, No, the statement is not correct. When housing prices rise, the supply of other goods and services increases and the CPI will definitely fall.D Question 5 For each of the following separate situations, determine the associated problem of inflation. Sam is a bookstore owner. He has to [ Choose ] reprint price tags frequently because prices of books increase from time to time. Everything was much cheaper in the past. I could buy a loaf of bread with just [ Choose ] 10 cents 30 years ago. Mary is deciding to start a store selling [ Choose ] hand-sewn T-shirts. She is very hesitant because the selling prices may not cover the cost of production in the future. It is not a good idea to deposit money to [ Choose ] a bank because the interest earned cannot cover the inflation cost. [ Choose ] Why food prices keep rising? I think this price confusion country is producing less and less food. money illusion menu costs I did not make any real capital gain from Shoe leather costs selling stocks. Why do I need to pay so future price level uncertainty much tax? wealth redistribution tax distortions Withdrawing money from the ATM is [ Choose ] inconvenient. Also, I often forgot the ATM passwords