Question 1

If the prices of the goods and services contained in the CPI market basket increase from the base period to the next year,we know that

Accepted Answer

A) the inflation rate is falling. 
B) the next year's CPI will be above 100. 
C) the next year's CPI will be below 100. 
D) the cost of the CPI market basket at next year's prices is lower than the cost of the CPI market basket at base period prices. 
E) the market basket used by the BLS must be changed next year to reflect consumers' new expenditures. 
A) the inflation rate is falling. 
B) the next year's CPI will be above 100. 
C) the next year's CPI will be below 100. 
D) the cost of the CPI market basket at next year's prices is lower than the cost of the CPI market basket at base period prices. 
E) the market basket used by the BLS must be changed next year to reflect consumers' new expenditures.

Question 2

If the real interest rate is 5 percent when the inflation rate is 4 percent,the nominal interest rate is

Accepted Answer

A) 1 percent. 
B) 9 percent. 
C) 20 percent. 
D) .80 percent. 
E) 1.25 percent. 
A) 1 percent. 
B) 9 percent. 
C) 20 percent. 
D) .80 percent. 
E) 1.25 percent.

Question 3

Which of the following formulas is used to calculate the inflation rate?

Accepted Answer

A) inflation rate = 100 ×   
B) inflation rate = 100 ×   
C) Inflation rate = 100 ×   
D) Inflation rate = 100 ×   
E) inflation rate = 100 ×   
A) inflation rate = 100 ×   
B) inflation rate = 100 ×   
C) Inflation rate = 100 ×   
D) Inflation rate = 100 ×   
E) inflation rate = 100 ×

Question 4

If the CPI is 231.4 in one year and is 241.2 in the next year,then the inflation rate equals

Accepted Answer

A) (241.2 - 231.4)× 100. 
B)    × 100. 
C)    × 100. 
D)    × 100. 
E)    × 100. 
A) (241.2 - 231.4)× 100. 
B)    × 100. 
C)    × 100. 
D)    × 100. 
E)    × 100.

Question 5

To compare the price of a loaf of bread produced in 1993 with the price of a loaf produced in this year,you should compare the value of the bread in

Accepted Answer

A) real prices. 
B) nominal prices. 
C) real quantity. 
D) nominal quantity. 
E) CPI quantity. 
A) real prices. 
B) nominal prices. 
C) real quantity. 
D) nominal quantity. 
E) CPI quantity.

Question 6

In the current year,the CPI is 122 and during the previous year the CPI was 115.The inflation rate between these years is

Accepted Answer

A) 5.7 percent. 
B) 6.1 percent. 
C) -5.7 percent. 
D) -6.1 percent. 
E) 1.61 percent. 
A) 5.7 percent. 
B) 6.1 percent. 
C) -5.7 percent. 
D) -6.1 percent. 
E) 1.61 percent.

Question 7

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 2013 is

Accepted Answer

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

Question 8

Looking at real and nominal interest rates in the United States since 1971,we see that the

Accepted Answer

A) nominal interest rate has at times been negative. 
B) real interest rate has been greater than 10 percent for most years. 
C) real interest rate has at times been negative. 
D) real interest rate was above 5 percent during the low inflation of the 1970s. 
E) real interest is generally greater than the nominal interest rate. 
A) nominal interest rate has at times been negative. 
B) real interest rate has been greater than 10 percent for most years. 
C) real interest rate has at times been negative. 
D) real interest rate was above 5 percent during the low inflation of the 1970s. 
E) real interest is generally greater than the nominal interest rate.

Question 9

-The data in the table above shows the consumption by families in a small (poor)economy.The families consume only salt and bread.The reference base period is 2011.The cost of the CPI market basket in 2010 is

Accepted Answer

A) $5.00. 
B) $64.00. 
C) $8.50. 
D) $52.00. 
E) unable to be calculated because information is needed about the quantities purchased in 2010. 
A) $5.00. 
B) $64.00. 
C) $8.50. 
D) $52.00. 
E) unable to be calculated because information is needed about the quantities purchased in 2010.

Question 10

-Consumers in a country buy only two goods,pens and CDs.The prices and quantities purchased by urban households are in the table above.The reference base year is 2011.If the current year is 2012,the cost of the CPI market basket in 2012 is

Accepted Answer

A) $3,400. 
B) $3,588. 
C) $3,580. 
D) $3,508. 
E) $3,500. 
A) $3,400. 
B) $3,588. 
C) $3,580. 
D) $3,508. 
E) $3,500.

Question 11

If the CPI is used as a cost of living index,incomes that are adjusted to reflect the changes in the CPI will

Accepted Answer

A) increase by more than the actual change in the cost of living. 
B) decrease by more than the actual change in the cost of living. 
C) increase by more than the actual change in quantities. 
D) decrease by more than the actual change in quantities. 
E) generally rise by about 2 percent a year because the standard of living generally rises by about 2 percent a year. 
A) increase by more than the actual change in the cost of living. 
B) decrease by more than the actual change in the cost of living. 
C) increase by more than the actual change in quantities. 
D) decrease by more than the actual change in quantities. 
E) generally rise by about 2 percent a year because the standard of living generally rises by about 2 percent a year.

Question 12

-The table above has information about the CPI,nominal wage rate,and nominal interest rate for the country of Syldavia for the years 2010 to 2012.The reference base year is 2010.The real interest rate in Syldavia during 2012 was

Accepted Answer

A) 2.8 percent. 
B) 5.2 percent. 
C) 9.0 percent. 
D) 0.6 percent. 
E) 8.4 percent. 
A) 2.8 percent. 
B) 5.2 percent. 
C) 9.0 percent. 
D) 0.6 percent. 
E) 8.4 percent.

Question 13

Which of the following statements about the nominal and the real wage rates is correct?

Accepted Answer

A) The nominal wage rate equals the real wage rate divided by the CPI and then multiplied by 100. 
B) The nominal wage rate is measured in the dollars of a base year. 
C) The real wage rate is measured in current year dollars. 
D) The real wage rate indicates how many goods and services can be purchased with an hour's labor. 
E) The real wage rate equals the nominal wage rate multiplied by the CPI then divided by 100. 
A) The nominal wage rate equals the real wage rate divided by the CPI and then multiplied by 100. 
B) The nominal wage rate is measured in the dollars of a base year. 
C) The real wage rate is measured in current year dollars. 
D) The real wage rate indicates how many goods and services can be purchased with an hour's labor. 
E) The real wage rate equals the nominal wage rate multiplied by the CPI then divided by 100.

If the prices of the goods and services contained in the CPI market basket increase from the base period to the next year,we know that

If the real interest rate is 5 percent when the inflation rate is 4 percent,the nominal interest rate is

Which of the following formulas is used to calculate the inflation rate?

If the CPI is 231.4 in one year and is 241.2 in the next year,then the inflation rate equals

To compare the price of a loaf of bread produced in 1993 with the price of a loaf produced in this year,you should compare the value of the bread in

In the current year,the CPI is 122 and during the previous year the CPI was 115.The inflation rate between these years is

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 2013 is

Looking at real and nominal interest rates in the United States since 1971,we see that the

-The data in the table above shows the consumption by families in a small (poor)economy.The families consume only salt and bread.The reference base period is 2011.The cost of the CPI market basket in 2010 is

-Consumers in a country buy only two goods,pens and CDs.The prices and quantities purchased by urban households are in the table above.The reference base year is 2011.If the current year is 2012,the cost of the CPI market basket in 2012 is

If the CPI is used as a cost of living index,incomes that are adjusted to reflect the changes in the CPI will

-The table above has information about the CPI,nominal wage rate,and nominal interest rate for the country of Syldavia for the years 2010 to 2012.The reference base year is 2010.The real interest rate in Syldavia during 2012 was

Which of the following statements about the nominal and the real wage rates is correct?

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

If the prices of the goods and services contained in the CPI market basket increase from the base period to the next year,we know that

If the real interest rate is 5 percent when the inflation rate is 4 percent,the nominal interest rate is

Which of the following formulas is used to calculate the inflation rate?

If the CPI is 231.4 in one year and is 241.2 in the next year,then the inflation rate equals

To compare the price of a loaf of bread produced in 1993 with the price of a loaf produced in this year,you should compare the value of the bread in

In the current year,the CPI is 122 and during the previous year the CPI was 115.The inflation rate between these years is

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 2013 is

Looking at real and nominal interest rates in the United States since 1971,we see that the

-The data in the table above shows the consumption by families in a small (poor)economy.The families consume only salt and bread.The reference base period is 2011.The cost of the CPI market basket in 2010 is

-Consumers in a country buy only two goods,pens and CDs.The prices and quantities purchased by urban households are in the table above.The reference base year is 2011.If the current year is 2012,the cost of the CPI market basket in 2012 is

If the CPI is used as a cost of living index,incomes that are adjusted to reflect the changes in the CPI will

-The table above has information about the CPI,nominal wage rate,and nominal interest rate for the country of Syldavia for the years 2010 to 2012.The reference base year is 2010.The real interest rate in Syldavia during 2012 was

Which of the following statements about the nominal and the real wage rates is correct?

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