Question 1

The presence of new goods that are of higher quality than the old goods leads the BLS to

Accepted Answer

A)  update the market basket every time a new good is available. 
B)  do nothing because at least some people still buy the old goods. 
C)  try to separate price differences from improvements in quality. 
D)  actually understate the cost of living when calculating the CPI. 
E)  immediately update the reference base period used in calculating the CPI. 
A)  update the market basket every time a new good is available. 
B)  do nothing because at least some people still buy the old goods. 
C)  try to separate price differences from improvements in quality. 
D)  actually understate the cost of living when calculating the CPI. 
E)  immediately update the reference base period used in calculating the CPI.

Question 2

$$\begin{array} { | c | c | c | c | c | } 
\hline \text { Item } & \begin{array} { c } 
\text { Quantity } \
( 2009 )
\end{array} & \text { Price (2009) } & \begin{array} { c } 
\text { Quantity } \
( 2010 )
\end{array} & \text { Price (2010) } \
\hline \text { Magazines } & 400 & \$ 5.00 & 450 & \$ 4.50 \
\hline \text { Movie tickets } & 50 & \$ 6.00 & 200 & \$ 8.00 \
\hline \text { Pizzas } & 100 & \$ 10.00 & 120 & \$ 10.50 \
\hline
\end{array}$$ 
The data in the table above shows the consumption by families in an economy.The year 2009 is the reference base period
-Based on the table above, the cost of the base period market basket in the base period is

Accepted Answer

A)  $3,300. 
B)  $21.00. 
C)  $3,250. 
D)  $4,650. 
E)  $4,885. 
A)  $3,300. 
B)  $21.00. 
C)  $3,250. 
D)  $4,650. 
E)  $4,885.

Question 3

If we look at the nominal versus real wage rates paid to Presidents over time, we find that

Accepted Answer

A)  George Washington was paid a higher real wage rate than Bill Clinton. 
B)  George W.Bush is the highest paid according to real wage rates. 
C)  the real wage rate has steadily increased to $400,000 per year. 
D)  the nominal wage has increased and decreased at different times because of inflation. 
E)  George W.Bush's nominal wage is about equal to the average nominal wage paid all presidents. 
A)  George Washington was paid a higher real wage rate than Bill Clinton. 
B)  George W.Bush is the highest paid according to real wage rates. 
C)  the real wage rate has steadily increased to $400,000 per year. 
D)  the nominal wage has increased and decreased at different times because of inflation. 
E)  George W.Bush's nominal wage is about equal to the average nominal wage paid all presidents.

Question 4

If you get an 8 percent increase in your nominal income, your real income

Accepted Answer

A)  definitely increases. 
B)  increases only if the inflation rate is more than 8 percent. 
C)  increases only if the inflation rate is equal to 8 percent. 
D)  increases only if the inflation rate is less than 8 percent. 
E)  increases if the inflation rate is more than or equal to 8 percent. 
A)  definitely increases. 
B)  increases only if the inflation rate is more than 8 percent. 
C)  increases only if the inflation rate is equal to 8 percent. 
D)  increases only if the inflation rate is less than 8 percent. 
E)  increases if the inflation rate is more than or equal to 8 percent.

Question 5

If you have a mortgage on your house at 6 percent and the inflation rate when the mortgage was acquired was 3 percent but has since increased and is now 8 percent per year; the current real interest rate is

Accepted Answer

A)  14 percent per year. 
B)  6 percent per year. 
C)  0 percent per year. 
D)  -2 percent per year. 
E)  8 percent per year. 
A)  14 percent per year. 
B)  6 percent per year. 
C)  0 percent per year. 
D)  -2 percent per year. 
E)  8 percent per year.

The presence of new goods that are of higher quality than the old goods leads the BLS to

If we look at the nominal versus real wage rates paid to Presidents over time, we find that

If you get an 8 percent increase in your nominal income, your real income

If you have a mortgage on your house at 6 percent and the inflation rate when the mortgage was acquired was 3 percent but has since increased and is now 8 percent per year; the current real interest rate is

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

Exam 7: The Cpi and the Cost of Living

The presence of new goods that are of higher quality than the old goods leads the BLS to

If we look at the nominal versus real wage rates paid to Presidents over time, we find that

If you get an 8 percent increase in your nominal income, your real income

If you have a mortgage on your house at 6 percent and the inflation rate when the mortgage was acquired was 3 percent but has since increased and is now 8 percent per year; the current real interest rate is

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters