Question 1

If prices have decreased since the base period,then

Accepted Answer

A) real GDP is smaller than nominal GDP. 
B) real GDP is larger than nominal GDP. 
C) real GDP is equal to nominal GDP. 
D) there is no way to adjust nominal GDP so that it equals real GDP. 
E) real GDP can no longer be compared to nominal GDP. 
A) real GDP is smaller than nominal GDP. 
B) real GDP is larger than nominal GDP. 
C) real GDP is equal to nominal GDP. 
D) there is no way to adjust nominal GDP so that it equals real GDP. 
E) real GDP can no longer be compared to nominal GDP.

Question 2

In 1995,the CPI was 152.5 and the price of an economics textbook was $70.00 and a music CD was $16.00.If the CPI was 172.3 in 2011,what were the prices of the economics textbook and the music CD in 2011 dollars?

Accepted Answer

To adjust the two prices,the ratio of th

Question 3

The CPI market basket is determined by

Accepted Answer

A) tax return data of households. 
B) supermarket purchases recorded by scanner technology. 
C) profit releases of the largest companies. 
D) a consumer survey. 
E) surveys asking large retail companies,such as Wal-Mart,about their sales of consumer goods and services. 
A) tax return data of households. 
B) supermarket purchases recorded by scanner technology. 
C) profit releases of the largest companies. 
D) a consumer survey. 
E) surveys asking large retail companies,such as Wal-Mart,about their sales of consumer goods and services.

Question 4

"The new goods bias puts a downward bias into the CPI and its measure of the inflation rate." Is the previous sentence correct or not? Explain your answer.

Accepted Answer

The sentence is false because the new go

Question 5

The change in the quantity of goods and services that an hour's work can buy is measured by the

Accepted Answer

A) nominal wage. 
B) real wage. 
C) CPI. 
D) real interest rate. 
E) inflation rate. 
A) nominal wage. 
B) real wage. 
C) CPI. 
D) real interest rate. 
E) inflation rate.

Question 6

If the CPI decreases from one year to the next,then the inflation rate is

Accepted Answer

A) positive. 
B) above 100. 
C) below 100. 
D) negative. 
E) 0. 
A) positive. 
B) above 100. 
C) below 100. 
D) negative. 
E) 0.

Question 7

-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 wage rate in Syldavia during 2011 was

Accepted Answer

A) $14.00. 
B) $15.00. 
C) $15.79. 
D) $14.22. 
E) $14.25. 
A) $14.00. 
B) $15.00. 
C) $15.79. 
D) $14.22. 
E) $14.25.

Question 8

The average starting salary for a history major is $29,500.If the CPI was 147.5,the real salary is

Accepted Answer

A) $200.00 an hour. 
B) $20,000. 
C) $35,000. 
D) $43,513. 
E) $14,750. 
A) $200.00 an hour. 
B) $20,000. 
C) $35,000. 
D) $43,513. 
E) $14,750.

Question 9

If your nominal income is $80,000 and your real income in base year prices is $71,500,what is the CPI?

Accepted Answer

A) 89 
B) 100 
C) 112 
D) 106 
E) 150 
A) 89 
B) 100 
C) 112 
D) 106 
E) 150

Question 10

If nominal GDP is $230 for a period and real GDP is $200 for the same period,what is the GDP price index for this period?

Accepted Answer

The GDP price index

Question 11

If the price of used cars rises,then the CPI will ________ and the 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 12

If the nominal interest rate is greater than the real interest rate,

Accepted Answer

A) it is an indication of economic growth. 
B) inflation must be occurring. 
C) lenders must lose because they can only make loans using the real interest rate. 
D) the real interest rate must be negative. 
E) None of the above answers is correct because it is not possible for the nominal interest rate to exceed the real interest rate. 
A) it is an indication of economic growth. 
B) inflation must be occurring. 
C) lenders must lose because they can only make loans using the real interest rate. 
D) the real interest rate must be negative. 
E) None of the above answers is correct because it is not possible for the nominal interest rate to exceed the real interest rate.

Question 13

The inflation rate between last year and this year was 14 percent.The CPI was 118 this year.What was the CPI last year?

Accepted Answer

A) 104.0 
B) 103.5 
C) 104.5 
D) 105.0 
E) 103.0 
A) 104.0 
B) 103.5 
C) 104.5 
D) 105.0 
E) 103.0

Question 14

When comparing the annual inflation rate in the United States based on the CPI with the annual inflation rate based on the PCE price index,the data show that the two inflation rates

Accepted Answer

A) move in opposite directions. 
B) remained constant over the forty year period after 1979. 
C) steadily increased over the forty year period after 1979. 
D) move up and down in similar but not identical ways. 
E) both fluctuate,but the fluctuations have little relationship to each other. 
A) move in opposite directions. 
B) remained constant over the forty year period after 1979. 
C) steadily increased over the forty year period after 1979. 
D) move up and down in similar but not identical ways. 
E) both fluctuate,but the fluctuations have little relationship to each other.

Question 15

If the inflation rate is greater than the nominal interest rate,then the

Accepted Answer

A) real interest rate will be negative. 
B) real interest rate will be positive. 
C) inflation rate will increase. 
D) inflation rate will decrease. 
E) nominal interest rate will be negative. 
A) real interest rate will be negative. 
B) real interest rate will be positive. 
C) inflation rate will increase. 
D) inflation rate will decrease. 
E) nominal interest rate will be negative.

Question 16

What is the difference between nominal variables and real variables? Discuss the calculations undertaken to determine the real wage rate and the real interest rate.Explain why the real wage rate and real interest rate are real variables.

Accepted Answer

Nominal variables are measured using cur

Question 17

In 2011,apples cost $1.49 a pound.Suppose the CPI was 120 in 2011 and 140 in 2012.If there is no change in the real price of an apple in 2012,what is the price of a pound of apples in 2012?

Accepted Answer

A) $2.74 
B) $1.69 
C) $1.66 
D) $1.74 
E) $1.28 
A) $2.74 
B) $1.69 
C) $1.66 
D) $1.74 
E) $1.28

Question 18

The formula for the CPI is

Accepted Answer

A) (Cost of CPI market basket at base period prices ÷ Cost of CPI market basket at current period prices)× 100. 
B) (Cost of CPI market basket at current period prices - Cost of CPI market basket at base period prices)× 100. 
C) (Cost of CPI market basket at base period prices - Cost of CPI market basket at current period prices)× 100. 
D) (Cost of CPI market basket at current period prices ÷ Cost of CPI market basket at base period prices)× 100. 
E) (Cost of CPI market basket at current period prices + Cost of CPI market basket at base period prices)× 100. 
A) (Cost of CPI market basket at base period prices ÷ Cost of CPI market basket at current period prices)× 100. 
B) (Cost of CPI market basket at current period prices - Cost of CPI market basket at base period prices)× 100. 
C) (Cost of CPI market basket at base period prices - Cost of CPI market basket at current period prices)× 100. 
D) (Cost of CPI market basket at current period prices ÷ Cost of CPI market basket at base period prices)× 100. 
E) (Cost of CPI market basket at current period prices + Cost of CPI market basket at base period prices)× 100.

Question 19

-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 2011.The inflation rate in Syldavia from 2011 to 2012 was

Accepted Answer

A) 8.0 percent. 
B) 8.4 percent. 
C) 3.0 percent. 
D) 4.0 percent. 
E) 10.3 percent. 
A) 8.0 percent. 
B) 8.4 percent. 
C) 3.0 percent. 
D) 4.0 percent. 
E) 10.3 percent.

Question 20

Suppose the CPI in 1983 is 100 and the CPI this year is 172.These values for the CPI mean that

Accepted Answer

A) inflation between the two years was 172 percent. 
B) typically,a good whose price was $100 in 1983 had a price of $172 this year. 
C) typically,a good whose price was $172 in 1983 had a price of $100 this year. 
D) typically,a good whose price was $100 in 1983 had a price of $139 this year. 
E) typically,a good whose price was $100 in 1983 had a price of $58 this year. 
A) inflation between the two years was 172 percent. 
B) typically,a good whose price was $100 in 1983 had a price of $172 this year. 
C) typically,a good whose price was $172 in 1983 had a price of $100 this year. 
D) typically,a good whose price was $100 in 1983 had a price of $139 this year. 
E) typically,a good whose price was $100 in 1983 had a price of $58 this year.

If prices have decreased since the base period,then

In 1995,the CPI was 152.5 and the price of an economics textbook was $70.00 and a music CD was $16.00.If the CPI was 172.3 in 2011,what were the prices of the economics textbook and the music CD in 2011 dollars?

The CPI market basket is determined by

"The new goods bias puts a downward bias into the CPI and its measure of the inflation rate." Is the previous sentence correct or not? Explain your answer.

The change in the quantity of goods and services that an hour's work can buy is measured by the

If the CPI decreases from one year to the next,then the inflation rate is

-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 wage rate in Syldavia during 2011 was

The average starting salary for a history major is $29,500.If the CPI was 147.5,the real salary is

If your nominal income is $80,000 and your real income in base year prices is $71,500,what is the CPI?

If nominal GDP is $230 for a period and real GDP is $200 for the same period,what is the GDP price index for this period?

If the price of used cars rises,then the CPI will and the GDP deflator will .

If the nominal interest rate is greater than the real interest rate,

The inflation rate between last year and this year was 14 percent.The CPI was 118 this year.What was the CPI last year?

When comparing the annual inflation rate in the United States based on the CPI with the annual inflation rate based on the PCE price index,the data show that the two inflation rates

If the inflation rate is greater than the nominal interest rate,then the

What is the difference between nominal variables and real variables? Discuss the calculations undertaken to determine the real wage rate and the real interest rate.Explain why the real wage rate and real interest rate are real variables.

In 2011,apples cost $1.49 a pound.Suppose the CPI was 120 in 2011 and 140 in 2012.If there is no change in the real price of an apple in 2012,what is the price of a pound of apples in 2012?

The formula for the CPI is

-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 2011.The inflation rate in Syldavia from 2011 to 2012 was

Suppose the CPI in 1983 is 100 and the CPI this year is 172.These values for the CPI mean that

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 prices have decreased since the base period,then

In 1995,the CPI was 152.5 and the price of an economics textbook was $70.00 and a music CD was $16.00.If the CPI was 172.3 in 2011,what were the prices of the economics textbook and the music CD in 2011 dollars?

The CPI market basket is determined by

"The new goods bias puts a downward bias into the CPI and its measure of the inflation rate." Is the previous sentence correct or not? Explain your answer.

The change in the quantity of goods and services that an hour's work can buy is measured by the

If the CPI decreases from one year to the next,then the inflation rate is

-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 wage rate in Syldavia during 2011 was

The average starting salary for a history major is $29,500.If the CPI was 147.5,the real salary is

If your nominal income is $80,000 and your real income in base year prices is $71,500,what is the CPI?

If nominal GDP is $230 for a period and real GDP is $200 for the same period,what is the GDP price index for this period?

If the price of used cars rises,then the CPI will ________ and the GDP deflator will ________.

If the nominal interest rate is greater than the real interest rate,

The inflation rate between last year and this year was 14 percent.The CPI was 118 this year.What was the CPI last year?

When comparing the annual inflation rate in the United States based on the CPI with the annual inflation rate based on the PCE price index,the data show that the two inflation rates

If the inflation rate is greater than the nominal interest rate,then the

What is the difference between nominal variables and real variables? Discuss the calculations undertaken to determine the real wage rate and the real interest rate.Explain why the real wage rate and real interest rate are real variables.

In 2011,apples cost $1.49 a pound.Suppose the CPI was 120 in 2011 and 140 in 2012.If there is no change in the real price of an apple in 2012,what is the price of a pound of apples in 2012?

The formula for the CPI is

-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 2011.The inflation rate in Syldavia from 2011 to 2012 was

Suppose the CPI in 1983 is 100 and the CPI this year is 172.These values for the CPI mean that

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 used cars rises,then the CPI will and the GDP deflator will .