Question 1

Assume that the CPI in 2018 was 217, while the CPI in 1990 was 82. If a person had $6000 in 1990, its equivalent purchasing power in 2018 would be $10 850.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following can cause demand-pull inflation if the economy is currently in equilibrium at full-employment GDP?

Accepted Answer

A) an increase in net exports 
B) a reduction in government spending 
C) an increase in the company income tax rate 
D) a decrease in real wages 
A) an increase in net exports 
B) a reduction in government spending 
C) an increase in the company income tax rate 
D) a decrease in real wages

Question 3

What is the broadest measure of the price level which includes all final goods and services?

Accepted Answer

A) producer price index 
B) consumer price index 
C) wholesale price index 
D) GDP deflator 
A) producer price index 
B) consumer price index 
C) wholesale price index 
D) GDP deflator

Question 4

What is the difference between the nominal interest rate and the real interest rate?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The nominal interest rate is t

Question 5

The nominal interest rate will be less than the real interest rate when the:

Accepted Answer

A) rate of inflation is positive but decreasing. 
B) rate of inflation is positive and increasing. 
C) rate of inflation is negative. 
D) real interest rate is negative. 
A) rate of inflation is positive but decreasing. 
B) rate of inflation is positive and increasing. 
C) rate of inflation is negative. 
D) real interest rate is negative.

Question 6

What does the producer price index (PPI)measure?

Accepted Answer

A) The average change in the prices paid for all goods produced in the economy over a given year. 
B) The average of the prices received by producers of goods and services at all stages of the production process. 
C) The level of production of goods and services generated in the economy in a given year. 
D) The difference between the prices consumers pay for goods and services and the prices producers pay for goods and services. 
A) The average change in the prices paid for all goods produced in the economy over a given year. 
B) The average of the prices received by producers of goods and services at all stages of the production process. 
C) The level of production of goods and services generated in the economy in a given year. 
D) The difference between the prices consumers pay for goods and services and the prices producers pay for goods and services.

Question 7

The 'inflation rate' measures the percentage increase in the price level from one year to the next.

Accepted Answer

A) True 
 B)False

Question 8

Suppose an economy has only three goods and the typical family purchases the amounts given in the following table. If 2012 is the base year, then what is the CPI for 2017?

Accepted Answer

A) 220 
B) 208 
C) 40.08 
D) 100 
A) 220 
B) 208 
C) 40.08 
D) 100

Question 9

The most widely used measure of inflation is based on which of the following price indices?

Accepted Answer

A) producer price index 
B) consumer price index 
C) GDP deflator 
D) wholesale price index 
A) producer price index 
B) consumer price index 
C) GDP deflator 
D) wholesale price index

Question 10

People who have borrowed money from banks at a fixed rate of interest will most likely:

Accepted Answer

A) experience losses if the inflation rate is higher than anticipated. 
B) benefit if the inflation rate is lower than anticipated. 
C) experience a rise in their real interest rate. 
D) benefit if the inflation rate is higher than anticipated. 
A) experience losses if the inflation rate is higher than anticipated. 
B) benefit if the inflation rate is lower than anticipated. 
C) experience a rise in their real interest rate. 
D) benefit if the inflation rate is higher than anticipated.

Assume that the CPI in 2018 was 217, while the CPI in 1990 was 82. If a person had $6000 in 1990, its equivalent purchasing power in 2018 would be $10 850.

Which of the following can cause demand-pull inflation if the economy is currently in equilibrium at full-employment GDP?

What is the broadest measure of the price level which includes all final goods and services?

What is the difference between the nominal interest rate and the real interest rate? _ _

The nominal interest rate will be less than the real interest rate when the:

What does the producer price index (PPI)measure?

The 'inflation rate' measures the percentage increase in the price level from one year to the next.

Suppose an economy has only three goods and the typical family purchases the amounts given in the following table. If 2012 is the base year, then what is the CPI for 2017?

The most widely used measure of inflation is based on which of the following price indices?

People who have borrowed money from banks at a fixed rate of interest will most likely:

Economics: Foundations and Models

Choices and Trade Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Gdp: Measuring Total Production, Income and Economic Growth

Economic Growth, the Financial System and Business Cycles

Long-Run Economic Growth: Sources and Policies

Unemployment

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 8: Inflation

Assume that the CPI in 2018 was 217, while the CPI in 1990 was 82. If a person had $6000 in 1990, its equivalent purchasing power in 2018 would be $10 850.

Which of the following can cause demand-pull inflation if the economy is currently in equilibrium at full-employment GDP?

What is the broadest measure of the price level which includes all final goods and services?

What is the difference between the nominal interest rate and the real interest rate? _____________________________________________________________________________________________ _____________________________________________________________________________________________

The nominal interest rate will be less than the real interest rate when the:

What does the producer price index (PPI)measure?

The 'inflation rate' measures the percentage increase in the price level from one year to the next.

Suppose an economy has only three goods and the typical family purchases the amounts given in the following table. If 2012 is the base year, then what is the CPI for 2017?

The most widely used measure of inflation is based on which of the following price indices?

People who have borrowed money from banks at a fixed rate of interest will most likely:

Economics: Foundations and Models

Choices and Trade Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Gdp: Measuring Total Production, Income and Economic Growth

Economic Growth, the Financial System and Business Cycles

Long-Run Economic Growth: Sources and Policies

Unemployment

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

What is the difference between the nominal interest rate and the real interest rate? _ _