FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 5: Measuring Economic Activity: Gdp and Unemployment

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 71

Multiple Choice

Review LaterAdd Note

Review Later

Suppose that the total expenditures for a typical household in 2000 equaled $5,500 per month, while the cost of purchasing exactly the same items in 2005 was $6,875. If 2000 is the base year, the CPI for the year 2005 equals:

A) 0.80
B) 1.00
C) 1.20
D) 1.25

E) A) and B)
F) B) and C)

Correct Answer

verified

Show Answer

Question 72

Multiple Choice

Review LaterAdd Note

Review Later

To ensure that your salary maintains its real purchasing power from year to year, your nominal salary must be:

A) deflated.
B) indexed.
C) aggregated.
D) hyperinflated.

E) A) and B)
F) A) and C)

Correct Answer

verified

Show Answer

Question 73

Multiple Choice

Review LaterAdd Note

Suppose the value of the CPI is 1.100 in year one, 1.122 in year two, and 1.133 in year three. Assume also that the price of computers increases by 3% between year one and year two, and by another 3% between year two and year three. The price level is increasing, the inflation rate is _______, and the relative price of computers is _________.

When statisticians fail to take into account improvements in the quality of goods and services, the CPI will tend to ______ the rate of inflation.

The real interest rate is the:

The real costs of inflation to society include:

As the rate of inflation increases, the increased cost to a consumer of more frequent trips to the bank to make cash withdrawals represents an increase in the:

Inflation reduces economic efficiency because it does each of the following EXCEPT:

For a given nominal interest rate, an unexpectedly high inflation rate ______ the real interest rate.

The core rate of inflation excludes food and energy prices because:

An extremely high rate of inflation is called _____.

The typical family on the Planet Econ consumes 10 pizzas, 7 pairs of jeans, and 20 gallons of milk. In 2004, pizzas cost $10 each, jeans cost $40 per pair, and milk cost $3 per gallon. In 2005, the price of pizzas increased to $14 each, while the price of jeans and milk remained the same. Between 2004 and 2005, a typical family's cost of living:

The inflation rate can be calculated as the percentage change in:

To prevent people paying a higher percentage of their income in taxes even when their real incomes have not changed, Congress:

The nominal return on an inflation-protected bond equals a fixed real return:

The annual percentage rate of change in the price level is the:

The measure of the cost of a standard basket of goods and services in any period relative to the cost of the same basket of goods and services in the base year is called the:

A real quantity is a quantity measured:

The price of a gallon of gasoline at the pump increased by 10 percent at the same time that the inflation rate was 5 percent. The nominal price of gasoline _____, and the real price of gasoline _____.

An investor purchasing an inflation protected bond with a fixed annual real return of 1.75 percent will earn a nominal annual return of ______ percent if the actual inflation rate turns out to be 3.25 percent.