Links for Article Review #2

Here are two links for the assignment due on Friday the 4th:

http://dallasfed.org/fed/annual/1999p/ar97.html

http://dallasfed.org/fed/annual/1999p/ar97.pdf

There is also a copy of the article on my I-drive, as well as a copy of the assignment.

Key to Test 2 Study Problems

Here is the key to the mulitple choice study problems. (See I-drive for a copy.) Let me know if you think there are any errors. (There usually are.)

1-C, 2-D, 3-C, 4-B, 5-A, 6-A, 7-C,
8-C, 9-C, 10-A, 11-D, 12-B, 13-B,
14-A, 15-B, 16-B, 17-D, 18-D, 19-B,
20-B, 21-D, 22-C, 23-C, 24-A,
25-A, 26-C, 27-C, 28-A, 29-A,
30-A, 31-B, 32-B, 33-B, 34-D, 35-D,
36-C, 37-B, 38-B, 39-C.

Notes: 18: D is the answer if it reads "Both B and C are correct."

8 is awkwardly worded. To clarify, of the 500,000 DVDs produced that quarter, 300,000 of them will be counted as consumption (C) and 200,000 will be counted positively in "change in inventory" in Investment (I). If/when they are sold later, there will be a debit in "change in inventory" and a credit in consumption.

Test #2

Your next test is Wednesday, October 19. But you knew that already.

Some sample multiple choice problems can be found on my I-drive (I:jjulian). The key to the study problems will be posted here sometime Tuesday afternoon. Please don't ask about the key until after 5:00 p.m. Thanks.

Good luck and check back.

Jack

Problem Set #2, Question 3

It was brought to my attention that problem 3 wasn't really a question. Which, as written, is true. An editing error resulted in the loss of the rest of the question. (A corrected version will appear on the copy available on my I-drive (I:jjulian). Thanks Tim McCall for pointing out this error. My bad.

Add the following to the problem:

Calculate the overall CPI for the retired person and the college student by multiplying the CPI for each of the categories by the relative importance of that category to the individual and then summing each of the categories. The CPI for all items in December 2004 was 190.3. How do your calculations for the CPI for the retired person and the college student compare to the overall CPI?

Note: the first two parts of the retired persons CPI is as follows:

(190.7 x 0.10) + (188.9 x 0.15) + ... = retired person's CPI

Where 190.7 is the housing CPI and 0.10 represents its 10% weight in the average retired person's market basket.