Question 1

The GDP deflator is

Accepted Answer

A) a measure of the level of production. 
B) always greater than 100. 
C) the price level during the base year. 
D) a measure of the price level. 
E) equal to nominal GDP during the base year. 
A) a measure of the level of production. 
B) always greater than 100. 
C) the price level during the base year. 
D) a measure of the price level. 
E) equal to nominal GDP during the base year. D

Question 2

To measure the CPI,the BLS economic assistants check the prices of

Accepted Answer

A) all the goods and services produced in a given year. 
B) some of the consumer goods but none of the services produced in a given year. 
C) about 80,000 goods and services each month. 
D) about 80,000 goods and services each quarter. 
E) only the prices of the goods and services whose prices have changed. 
A) all the goods and services produced in a given year. 
B) some of the consumer goods but none of the services produced in a given year. 
C) about 80,000 goods and services each month. 
D) about 80,000 goods and services each quarter. 
E) only the prices of the goods and services whose prices have changed. C

Question 3

The more money an average household spends on one specific type of good or service per month,the

Accepted Answer

A) smaller the relative importance of that item in the CPI market basket. 
B) larger the relative importance of that item in the CPI market basket. 
C) costlier it will be to conduct the Consumer Expenditure Survey. 
D) less significant an increase in the price of that good or service will be for the household. 
E) more frequently its price is checked when calculating the CPI. 
A) smaller the relative importance of that item in the CPI market basket. 
B) larger the relative importance of that item in the CPI market basket. 
C) costlier it will be to conduct the Consumer Expenditure Survey. 
D) less significant an increase in the price of that good or service will be for the household. 
E) more frequently its price is checked when calculating the CPI. B

Question 4

If the price of rocket fuel imported from Russia and used by NASA suddenly increases,then the U.S.CPI will ________ and the U.S.GDP deflator will ________.

Accepted Answer

A) increase;increase 
B) increase;not change 
C) not change;increase 
D) not change;not change 
E) increase;increase by more than the CPI 
A) increase;increase 
B) increase;not change 
C) not change;increase 
D) not change;not change 
E) increase;increase by more than the CPI

Question 5

-The trends displayed in the table can best be explained by

Accepted Answer

A) the nominal wage rate has increased at a rate about equal to the inflation rate. 
B) the real wage rate has increased at a rate about equal to the inflation rate. 
C) service industries have increased as a proportion of the economy and they tend to have higher nominal wage rates. 
D) the inflation rate has been rising over the time period. 
E) None of the above can explain the trends in the figure. 
A) the nominal wage rate has increased at a rate about equal to the inflation rate. 
B) the real wage rate has increased at a rate about equal to the inflation rate. 
C) service industries have increased as a proportion of the economy and they tend to have higher nominal wage rates. 
D) the inflation rate has been rising over the time period. 
E) None of the above can explain the trends in the figure.

Question 6

The Consumer Price Index market basket contains

Accepted Answer

A) the minimal dietary requirements of an average urban household. 
B) the U.S.-produced goods and services purchased by an average urban household. 
C) the ideal calorie intake of each member of an average urban household. 
D) the goods and services purchased by an average urban household. 
E) the goods and services that the economists working for the BLS believes consumers should buy. 
A) the minimal dietary requirements of an average urban household. 
B) the U.S.-produced goods and services purchased by an average urban household. 
C) the ideal calorie intake of each member of an average urban household. 
D) the goods and services purchased by an average urban household. 
E) the goods and services that the economists working for the BLS believes consumers should buy.

Question 7

"The bias in the CPI distorts private contracts because a future payment that is linked to the CPI will be raised above the true increase in the price level." Is the previous sentence true or false?

Accepted Answer

The sentence is correct.The fa

Question 8

In the current year,the CPI is 160 and during the previous year the CPI was 181.The inflation rate between these years is

Accepted Answer

A) 11.6 percent. 
B) 13.1 percent. 
C) -11.6 percent. 
D) -13.1 percent. 
E) -013.1 percent. 
A) 11.6 percent. 
B) 13.1 percent. 
C) -11.6 percent. 
D) -13.1 percent. 
E) -013.1 percent.

Question 9

Between the base period and the next period,prices stay constant.The GDP price index in the next period

Accepted Answer

A) cannot be calculated without knowing how much the quantity changed. 
B) will equal 0 because there is no change. 
C) is equal to 100 because there is no change. 
D) is equal to 1 because there is no change. 
E) is equal to 50 because there is no change. 
A) cannot be calculated without knowing how much the quantity changed. 
B) will equal 0 because there is no change. 
C) is equal to 100 because there is no change. 
D) is equal to 1 because there is no change. 
E) is equal to 50 because there is no change.

Question 10

When calculating the CPI,the Bureau of Labor Statistics

Accepted Answer

A) weights the price of goods and services in the basket relative to the importance of the average urban household budget. 
B) sums the prices of the goods and services in the average urban household consumption basket. 
C) weights the price of all goods and services produced in a year within a country's borders. 
D) multiplies by 100 the average price of goods and services in the average urban consumer's basket. 
E) makes certain to weight the goods and services equally so that no one product is over-weighted. 
A) weights the price of goods and services in the basket relative to the importance of the average urban household budget. 
B) sums the prices of the goods and services in the average urban household consumption basket. 
C) weights the price of all goods and services produced in a year within a country's borders. 
D) multiplies by 100 the average price of goods and services in the average urban consumer's basket. 
E) makes certain to weight the goods and services equally so that no one product is over-weighted.

Question 11

When a good gets better from one year to the next,the CPI has a what is called

Accepted Answer

A) new goods bias. 
B) quality change bias. 
C) commodity substitution bias. 
D) outlet substitution bias. 
E) magnitude of change bias. 
A) new goods bias. 
B) quality change bias. 
C) commodity substitution bias. 
D) outlet substitution bias. 
E) magnitude of change bias.

Question 12

The CPI for 2012 was 121,and for 2013 it was 132.What was the inflation rate between 2012 and 2013?

Accepted Answer

A) 9.09 percent 
B) 11 percent 
C) 10 percent 
D) 8.3 percent 
E) 121.0 percent 
A) 9.09 percent 
B) 11 percent 
C) 10 percent 
D) 8.3 percent 
E) 121.0 percent

Question 13

The reference base period for the CPI is

Accepted Answer

A) the previous year. 
B) whatever the political party that is in control of Congress decides. 
C) currently 1913. 
D) currently 1982 to 1984. 
E) currently 2005. 
A) the previous year. 
B) whatever the political party that is in control of Congress decides. 
C) currently 1913. 
D) currently 1982 to 1984. 
E) currently 2005.

Question 14

Which of the following is NOT a source of bias in the CPI?
I.quality change bias
Ii.new goods bias
Iii.quantity change bias

Accepted Answer

A) i only 
B) ii only 
C) iii only 
D) i and ii 
E) ii and iii 
A) i only 
B) ii only 
C) iii only 
D) i and ii 
E) ii and iii

Question 15

When the nominal price of a good increases over time,must its real price also increase?

Accepted Answer

No,even though the nominal price of a go

Question 16

The Consumer Price Index (CPI)measures

Accepted Answer

A) the prices of a few consumer goods and services. 
B) the prices of those consumer goods and services that increased in price. 
C) the average of the prices paid by urban consumers for a fixed market basket of goods and services. 
D) consumer confidence in the economy. 
E) the average of the costs paid by businesses to produce a fixed market basket of consumer goods and services. 
A) the prices of a few consumer goods and services. 
B) the prices of those consumer goods and services that increased in price. 
C) the average of the prices paid by urban consumers for a fixed market basket of goods and services. 
D) consumer confidence in the economy. 
E) the average of the costs paid by businesses to produce a fixed market basket of consumer goods and services.

Question 17

If the cost of the CPI market basket at current period prices is $275 and the cost of the CPI market basket at base period prices is $350,the CPI is

Accepted Answer

A) 79. 
B) 100. 
C) 127. 
D) 350. 
E) 275. 
A) 79. 
B) 100. 
C) 127. 
D) 350. 
E) 275.

Question 18

The price of dishwashers has remained relatively constant while the quality of dishwashers has improved.The CPI

Accepted Answer

A) is adjusted monthly to reflect the improvement in quality. 
B) is increased monthly to reflect the increased quality of dishwashers. 
C) has an upward bias if it is not adjusted to take account of the higher quality. 
D) has an upward bias because it does not reflect the increased production of dishwashers. 
E) should not take account of any quality changes because it is a price index not a quality index. 
A) is adjusted monthly to reflect the improvement in quality. 
B) is increased monthly to reflect the increased quality of dishwashers. 
C) has an upward bias if it is not adjusted to take account of the higher quality. 
D) has an upward bias because it does not reflect the increased production of dishwashers. 
E) should not take account of any quality changes because it is a price index not a quality index.

Question 19

The data in the table above shows the consumption by families in an economy.The year 2013 is the reference base period.
-Based on the table above,the CPI for 2014 is

Accepted Answer

A) 98.5. 
B) 105.1. 
C) 102.5. 
D) 5.0 percent. 
E) 100. 
A) 98.5. 
B) 105.1. 
C) 102.5. 
D) 5.0 percent. 
E) 100.

Question 20

If the GDP price index is 125 and nominal GDP is $130 billion,then real GDP equals ________ billion.

Accepted Answer

A) $104.00 
B) $162.50 
C) $96 
D) $1.04 
E) $9.6 
A) $104.00 
B) $162.50 
C) $96 
D) $1.04 
E) $9.6

The GDP deflator is

To measure the CPI,the BLS economic assistants check the prices of

The more money an average household spends on one specific type of good or service per month,the

If the price of rocket fuel imported from Russia and used by NASA suddenly increases,then the U.S.CPI will and the U.S.GDP deflator will .

-The trends displayed in the table can best be explained by

The Consumer Price Index market basket contains

"The bias in the CPI distorts private contracts because a future payment that is linked to the CPI will be raised above the true increase in the price level." Is the previous sentence true or false?

In the current year,the CPI is 160 and during the previous year the CPI was 181.The inflation rate between these years is

Between the base period and the next period,prices stay constant.The GDP price index in the next period

When calculating the CPI,the Bureau of Labor Statistics

When a good gets better from one year to the next,the CPI has a what is called

The CPI for 2012 was 121,and for 2013 it was 132.What was the inflation rate between 2012 and 2013?

The reference base period for the CPI is

Which of the following is NOT a source of bias in the CPI? I.quality change bias Ii.new goods bias Iii.quantity change bias

When the nominal price of a good increases over time,must its real price also increase?

The Consumer Price Index (CPI)measures

If the cost of the CPI market basket at current period prices is $275 and the cost of the CPI market basket at base period prices is $350,the CPI is

The price of dishwashers has remained relatively constant while the quality of dishwashers has improved.The CPI

The data in the table above shows the consumption by families in an economy.The year 2013 is the reference base period. -Based on the table above,the CPI for 2014 is

If the GDP price index is 125 and nominal GDP is $130 billion,then real GDP equals ________ billion.

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 16: The Cpi and the Cost of Living

The GDP deflator is

To measure the CPI,the BLS economic assistants check the prices of

The more money an average household spends on one specific type of good or service per month,the

If the price of rocket fuel imported from Russia and used by NASA suddenly increases,then the U.S.CPI will ________ and the U.S.GDP deflator will ________.

-The trends displayed in the table can best be explained by

The Consumer Price Index market basket contains

"The bias in the CPI distorts private contracts because a future payment that is linked to the CPI will be raised above the true increase in the price level." Is the previous sentence true or false?

In the current year,the CPI is 160 and during the previous year the CPI was 181.The inflation rate between these years is

Between the base period and the next period,prices stay constant.The GDP price index in the next period

When calculating the CPI,the Bureau of Labor Statistics

When a good gets better from one year to the next,the CPI has a what is called

The CPI for 2012 was 121,and for 2013 it was 132.What was the inflation rate between 2012 and 2013?

The reference base period for the CPI is

Which of the following is NOT a source of bias in the CPI? I.quality change bias Ii.new goods bias Iii.quantity change bias

When the nominal price of a good increases over time,must its real price also increase?

The Consumer Price Index (CPI)measures

If the cost of the CPI market basket at current period prices is $275 and the cost of the CPI market basket at base period prices is $350,the CPI is

The price of dishwashers has remained relatively constant while the quality of dishwashers has improved.The CPI

The data in the table above shows the consumption by families in an economy.The year 2013 is the reference base period. -Based on the table above,the CPI for 2014 is

If the GDP price index is 125 and nominal GDP is $130 billion,then real GDP equals ________ billion.

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

If the price of rocket fuel imported from Russia and used by NASA suddenly increases,then the U.S.CPI will and the U.S.GDP deflator will .