seholds can substitute cheaper goods instead of more expensive goods when prices increase. 4) Which of the following best describes what is necessary for consumers to maintain the same (3pts) standard of living over time if there is inflation? Nominal incomes are the same over time Consumer incomes must increase at a faster rate than the official rate of inflation Government spending must increase at the same rate as the rate of inflation Business investment must increase at a faster rate than the official rate of inflation Consumer incomes must increase at least the same rate as the official rate of inflation 5) The table below shows quantities purchased and the prices of the only two goods citizens of (5pts) Bloominonionland buy over three years. Year Quantity of bubble Price of bubble Quantity of kangaroo Price of kangaroo tea steaks steaks 201610 $4 $8 201710 $5 $12 201810 $6 UT $10 What is the consumer price index for 2017 using 2016 as a base year? 0 1.5 0 50 0 137.5 0 66.7 6) Which of the following best describes the relationship between a worker's real wage and (3pts ) nominal wage when there is no inflation? Real wage is higher than nominal wage Nominal wage is higher than real wage. Real wage and nominal wage are the same. Both real and nominal wages are increase, but in different amounts. Both real and nominal wages are decrease, but in different amounts. 7) Which of the following best explains why the consumer price index (CPI) may not accurately (3pts) measure changes in the cost of living? It only includes goods purchased every day It does not account for changes in consumers' incomes When prices of some goods go up, consumers buy less of those and more of goods that are cheaper When real GDP increases, the CPI doesn't change It doesn't include all prices, such as input costs to firms (pts) 8) Which of the following is correct about the basket of goods that makes up a country's