Question 1

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 taxes 
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 taxes

Question 2

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. 
A) demand-push inflation. 
B) demand-pull inflation. 
C) cost-push inflation. 
D) cost-pull inflation.

Question 3

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) 150 
A) 1 
B) 100 
C) 1.5 
D) 150

Question 4

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. 
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.

Question 5

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

Accepted Answer

A) Hyperinflation 
B) Cost-push 
C) Stagflation 
D) Demand-pull 
A) Hyperinflation 
B) Cost-push 
C) Stagflation 
D) Demand-pull

Question 6

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. 
A) real value. 
B) nominal value. 
C) marginal value. 
D) constant value.

Question 7

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. 
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.

Question 8

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% 
A) 4.5 
B) 4.8% 
C) 6% 
D) 6.3%

Question 9

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. 
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.

Question 10

A decline in the overall prices of goods and services is

Accepted Answer

A) disinflation. 
B) inflation. 
C) deflation. 
D) hyperinflation. 
A) disinflation. 
B) inflation. 
C) deflation. 
D) hyperinflation.

Question 11

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

Accepted Answer

A) disinflation. 
B) inflation. 
C) deflation. 
D) hyperinflation. 
A) disinflation. 
B) inflation. 
C) deflation. 
D) hyperinflation.

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. 
A) demand-push inflation. 
B) demand-pull inflation. 
C) cost-push inflation. 
D) cost-pull inflation.

Question 13

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, iv 
A) i, ii ,iii 
B) i, ii ,iii, iv 
C) i, iv 
D) i, iii, iv

Question 14

Values that have been adjusted for inflation is known as

Accepted Answer

A) real value. 
B) nominal value. 
C) marginal value. 
D) face value. 
A) real value. 
B) nominal value. 
C) marginal value. 
D) face value.

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.

Accepted Answer

A) 1.5 
B) 150 
C) .67 
D) 66.7 
A) 1.5 
B) 150 
C) .67 
D) 66.7

Question 16

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 standard 
A) Unit of account 
B) Store of value 
C) Medium of exchange 
D) Unit of standard

Question 17

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

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

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

Inflation is

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

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

Which of the following statements is correct?

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

A measure used to calculate inflation is the

A decline in the overall prices of goods and services is

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

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

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?

Values that have been adjusted for inflation is known as

Which of the following is not a role of money?

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

An Introduction to the Economic Way of Thinking

Production Possibilities

Demand Supply

Consumer Surplus, Producer Surplus, and Economic Efficiency

Elasticity

Measuring Economic Activity

The Power and Limits of Markets

Wage Determination and Superstar Salaries

The Minimum Wage

International Trade of Goods

Immigration and the International Trade of Labor

Foreign Exchange and the International Trade of Money

Farm Policy

The Economics of Illegal Drugs

Pollution, the Environment, and Global Warming

The Economics of Education

Competition and Monopoly

The Economics of Labor Market Discrimination

Poverty and the Distribution of Income

The Economics of Health Care

Monetary Policy and the Federal Reserve

Fiscal Policy and the Federal Budget

Filters

Exam 7: Inflation and the Measurement of Prices

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

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

Inflation is

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

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

Which of the following statements is correct?

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

A measure used to calculate inflation is the

A decline in the overall prices of goods and services is

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

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

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?

Values that have been adjusted for inflation is known as

Which of the following is not a role of money?

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

An Introduction to the Economic Way of Thinking

Production Possibilities

Demand Supply

Consumer Surplus, Producer Surplus, and Economic Efficiency

Elasticity

Measuring Economic Activity

The Power and Limits of Markets

Wage Determination and Superstar Salaries

The Minimum Wage

International Trade of Goods

Immigration and the International Trade of Labor

Foreign Exchange and the International Trade of Money

Farm Policy

The Economics of Illegal Drugs

Pollution, the Environment, and Global Warming

The Economics of Education

Competition and Monopoly

The Economics of Labor Market Discrimination

Poverty and the Distribution of Income

The Economics of Health Care

Monetary Policy and the Federal Reserve

Fiscal Policy and the Federal Budget

Filters