Question 1

You decide you want to compare your average price level for what you spend on entertainment.Last year, which you decide will be the base year, your spent $50 for a concert, $15 per movie, and $25 for a dinner out.This year, these same activities cost $75, $20, and $40, respectively.Calculate your entertainment index.

Accepted Answer

A)  1.5
B)  150
C)  .67
D)  66.7E) C) and D)
F) None of the above

Question 2

A slowing of the rate of price increases in the economy is

Accepted Answer

A)  disinflation.
B)  inflation.
C)  deflation.
D)  hyperinflation.E) A) and C)
F) B) and D)

Question 3

The inflation experienced by the United States during the 1970s was a result of

Accepted Answer

A)  demand-push inflation.
B)  demand-pull inflation.
C)  cost-push inflation.
D)  cost-pull inflation.E) None of the above
F) A) and B)

Question 4

Values that have been adjusted for inflation is known as

Accepted Answer

A)  real value.
B)  nominal value.
C)  marginal value.
D)  face value.E) B) and D)
F) All of the above

Question 5

Consider the following sectors of an economy's population. i.Savers
Ii) Borrowers
Iii) People of fixed income
Iv) Lenders
Which of the above lose due to inflation?

Accepted Answer

A)  i, ii ,iii
B)  i, ii ,iii, iv
C)  i, iv
D)  i, iii, ivE) A) and B)
F) A) and C)

Question 6

Which of the following is not a role of money?

Accepted Answer

A)  Unit of account
B)  Store of value
C)  Medium of exchange
D)  Unit of standardE) None of the above
F) All of the above

Question 7

This type of inflation is a result of increases in aggregate demand.

Accepted Answer

A)  Hyperinflation
B)  Cost-push
C)  Stagflation
D)  Demand-pullE) None of the above
F) B) and C)

Question 8

Values that are in current, or face, value, is known as

Accepted Answer

A)  real value.
B)  nominal value.
C)  marginal value.
D)  constant value.E) B) and C)
F) A) and B)

Question 9

In year 1 the Consumer Price Index was 125 and 131 in the next year.What is the rate of inflation?

Accepted Answer

A)  4.5
B)  4.8%
C)  6%
D)  6.3%E) A) and B)
F) A) and C)

Question 10

A decline in the overall prices of goods and services is

Accepted Answer

A)  disinflation.
B)  inflation.
C)  deflation.
D)  hyperinflation.E) B) and D)
F) A) and B)

Question 11

The measure of the average prices of a given set of goods and services over time is an)

Accepted Answer

A)  business cycle.
B)  reflection of consumption patterns.
C)  price index.
D)  indicator of employment levels.E) A) and B)
F) B) and D)

Question 12

Inflation that results from an increase in any of the components of aggregate demand is

Accepted Answer

A)  demand-push inflation.
B)  demand-pull inflation.
C)  cost-push inflation.
D)  cost-pull inflation.E) None of the above
F) A) and D)

Question 13

Inflation is

Accepted Answer

A)  the rise in all prices in an economy.
B)  the rise in the general level of prices in an economy.
C)  the rise in the general level of prices of personal consumption of urban consumers.
D)  the rise in the rate of increase in all prices in an economy.E) B) and D)
F) A) and D)

Question 14

Which of the following statements is correct?

Accepted Answer

A)  The CPI is the ratio of the cost of the market basket in the base year to the cost of the market basket in one year.
B)  The CPI is the ratio of the cost of the market basket in the base year to the cost of the market basket in one year multiplied by 100.
C)  The CPI is the ratio of the cost of the market basket in one year to the cost of the market basket in the base year.
D)  The CPI is the ratio of the cost of the market basket in one year to the cost of the market basket in the base year multiplied by 100.E) None of the above
F) All of the above

Question 15

You decide you want to compare your average price level for what you spend on entertainment.Last year, which you decide will be the base year, your spent $50 for a concert, $15 per movie, and $25 for a dinner out.This year, these same activities cost $75, $20, and $40, respectively.Calculate your entertainment index in the base year.

Accepted Answer

A)  1
B)  100
C)  1.5
D)  150E) A) and B)
F) C) and D)

Question 16

A measure used to calculate inflation is the

Accepted Answer

A)  difference in Consumer Price Index between two periods.
B)  change in the PPI between two periods.
C)  percent change in the price index between two periods.
D)  summation of the price indices between two periods.E) All of the above
F) A) and B)

Question 17

Which of the following would contribute to cost-push inflation?

Accepted Answer

A)  An increase in the costs of inputs of production
B)  An increase in the supply of inputs of production
C)  An increase in government spending
D)  An increase in income taxesE) B) and C)
F) A) and B)

Exam 7: Inflation and the Measurement of Prices

Which of the following statements is correct?

Correct Answer
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A measure used to calculate inflation is the

Correct Answer
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A slowing of the rate of price increases in the economy is

Correct Answer
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A decline in the overall prices of goods and services is

Correct Answer
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Consider the following sectors of an economy's population. i.Savers Ii) Borrowers Iii) People of fixed income Iv) Lenders Which of the above lose due to inflation?

Correct Answer
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In year 1 the Consumer Price Index was 125 and 131 in the next year.What is the rate of inflation?

Correct Answer
verified

Values that are in current, or face, value, is known as

Correct Answer
verified

Values that have been adjusted for inflation is known as

Correct Answer
verified

The measure of the average prices of a given set of goods and services over time is an)

Correct Answer
verified

The inflation experienced by the United States during the 1970s was a result of

Correct Answer
verified

This type of inflation is a result of increases in aggregate demand.

Correct Answer
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Inflation is

Correct Answer
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Correct Answer
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Inflation that results from an increase in any of the components of aggregate demand is

Correct Answer
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Correct Answer
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Which of the following would contribute to cost-push inflation?

Correct Answer
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Which of the following is not a role of money?

Correct Answer
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Exam 7: Inflation and the Measurement of Prices

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

A measure used to calculate inflation is the

Correct AnswerverifiedShow Answer

A slowing of the rate of price increases in the economy is

Correct AnswerverifiedShow Answer

A decline in the overall prices of goods and services is

Correct AnswerverifiedShow Answer

Consider the following sectors of an economy's population. i.Savers Ii) Borrowers Iii) People of fixed income Iv) Lenders Which of the above lose due to inflation?

Correct AnswerverifiedShow Answer

In year 1 the Consumer Price Index was 125 and 131 in the next year.What is the rate of inflation?

Correct AnswerverifiedShow Answer

Values that are in current, or face, value, is known as

Correct AnswerverifiedShow Answer

Values that have been adjusted for inflation is known as

Correct AnswerverifiedShow Answer

The measure of the average prices of a given set of goods and services over time is an)

Correct AnswerverifiedShow Answer

The inflation experienced by the United States during the 1970s was a result of

Correct AnswerverifiedShow Answer

This type of inflation is a result of increases in aggregate demand.

Correct AnswerverifiedShow Answer

Inflation is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Inflation that results from an increase in any of the components of aggregate demand is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following would contribute to cost-push inflation?

Correct AnswerverifiedShow Answer

Which of the following is not a role of money?

Correct AnswerverifiedShow Answer

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