Suppose the price of a box of donuts rises from $10.00 to $11.00 and the price of a packet of cookies rises from $2.00 to $2.50. If theConsumer Price Index(CPI) rises from 100 to 120, what will people likely buy?

a.fewer donuts and more cookies

b.more donuts and fewer cookies

c.more donuts and more cookies

d.fewer donuts and fewer cookies

Thelma is a US citizen, but only works in Italy. How does the value of her production affect the GDP of both countries?

a.it lowers Italian GDP and raises US GDP

b.it raises Italian GDP and US GDP is unaffected

c.it raises Italian GDP and lowers US GDP

d.it raises both Italian and US GDP

Louise goes to the liquor store to make her weekly purchase of beer. She notices that the price of beer has increased by 10 percent, and so decides to buy some wine instead. Which problem in the construction of theConsumer Price Index(CPI) is this situation most relevant to?

a.unmeasured quality change

b.substitution bias

c.income effect

d.introduction of new goods

Between the beginning of 2019 and the beginning of 2020, the CPI in Ghana rose from 96 to 104. In Togo, it rose from 90 to 96. What were the inflation rates in the two countries?

a.7.69 percent in Ghana and 6.25 percent in Togo

b.8.33 percent in Ghana and 6.25 percent in Togo

c.8.33 percent in Ghana and 6.67 percent in Togo

d.7.69 percent in Ghana and 6.67 percent in Togo