Question 1

The formula for a real percentage change is

Accepted Answer

A)  the nominal percentage change minus the inflation rate. 
B)  the nominal percentage change divided by the inflation rate. 
C)  the nominal percentage change plus the inflation rate. 
D)  the nominal percentage change multiplied by the inflation rate. 
A)  the nominal percentage change minus the inflation rate. 
B)  the nominal percentage change divided by the inflation rate. 
C)  the nominal percentage change plus the inflation rate. 
D)  the nominal percentage change multiplied by the inflation rate.

Question 2

What does the phrase "owners' equivalent rent" mean?

Accepted Answer

A)  It is the price of five years' worth of housing services. 
B)  It is the price of a home. 
C)  It is the value of a year's worth of housing services. 
D)  It is the value of three years' worth of housing services. 
A)  It is the price of five years' worth of housing services. 
B)  It is the price of a home. 
C)  It is the value of a year's worth of housing services. 
D)  It is the value of three years' worth of housing services.

Question 3

An dollar-amount increase that has not been adjusted for inflation is called

Accepted Answer

A)  a real increase. 
B)  a nominal increase. 
C)  a net increase. 
D)  a inflationary increase. 
A)  a real increase. 
B)  a nominal increase. 
C)  a net increase. 
D)  a inflationary increase.

Question 4

Some goods have become less expensive due to

Accepted Answer

A)  globalization and technology. 
B)  government deregulation. 
C)  government regulation. 
D)  GDP growth. 
A)  globalization and technology. 
B)  government deregulation. 
C)  government regulation. 
D)  GDP growth.

Question 5

$$\begin{array}{l}
\begin{array} { | c | c | } 
\hline \text { Good } & \begin{array} { c } 
\text { Price Increase since } \
\text { Last Year }
\end{array} \
\hline \text { Amusement park tickets } & 5.0 \% \
\hline \text { Bowling balls } & 4.2 \% \
\hline \text { Camouflage neckties } & 3.1 \% \
\hline
\end{array}\
\text { Table } 8.1
\end{array}$$ Refer to Table 8.1,which gives hypothetical data on price changes for three goods.Which good(s)became relatively more expensive for buyers?

Accepted Answer

A)  Amusement park tickets only. 
B)  None of the goods became relatively more expensive. 
C)  It depends on the overall rate of inflation in the economy. 
D)  All three goods became relatively more expensive. 
A)  Amusement park tickets only. 
B)  None of the goods became relatively more expensive. 
C)  It depends on the overall rate of inflation in the economy. 
D)  All three goods became relatively more expensive.

Question 6

Real dollars are also called inflation-adjusted dollars.

Accepted Answer

A) True 
 B)False

Question 7

Money illusion occurs

Accepted Answer

A)  at a magic show. 
B)  when money disappears. 
C)  when we disregard inflation adjustments for dollar values. 
D)  when prices decrease. 
A)  at a magic show. 
B)  when money disappears. 
C)  when we disregard inflation adjustments for dollar values. 
D)  when prices decrease.

Question 8

$$\begin{array}{l}
\begin{array} { | c | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Antonio's Nominal } \
\text { Hourly Wage }
\end{array} & \begin{array} { c } 
\text { Consumer Price } \
\text { Index }
\end{array} \
\hline 2006 & \$ 8.40 & 201.6 \
\hline 2010 & \$ 9.05 & 218.1 \
\hline
\end{array}\
\text { Table } 8.2
\end{array}$$ Refer to Table 8.2.From 2006 to 2010,Antonio received a total of $0.65 in pay raises,and the CPI also increased as shown in the table.What happened to Antonio's real wage from 2006 to 2010?

Accepted Answer

A)  It rose because $9.05 is greater than $8.40. 
B)  It rose because Antonio's nominal wage and the CPI were both higher in 2010 than in 2006. 
C)  It fell because Antonio's nominal wage rose more slowly than did the CPI. 
D)  It fell because the change in the CPI was 16.5, which is greater than Antonio's wage. 
A)  It rose because $9.05 is greater than $8.40. 
B)  It rose because Antonio's nominal wage and the CPI were both higher in 2010 than in 2006. 
C)  It fell because Antonio's nominal wage rose more slowly than did the CPI. 
D)  It fell because the change in the CPI was 16.5, which is greater than Antonio's wage.

Question 9

Which of the following countries has not experienced hyperinflation?

Accepted Answer

A)  Norway. 
B)  Brazil. 
C)  Germany. 
D)  Bolivia. 
A)  Norway. 
B)  Brazil. 
C)  Germany. 
D)  Bolivia.

Question 10

Disinflation is

Accepted Answer

A)  a decrease in prices. 
B)  a decrease in inflation rates. 
C)  an increase in prices. 
D)  an increase in inflation rates. 
A)  a decrease in prices. 
B)  a decrease in inflation rates. 
C)  an increase in prices. 
D)  an increase in inflation rates.

Question 11

Expected inflation is

Accepted Answer

A)  the inflation rate that governments require from year to year. 
B)  the inflation rate that consumers and businesses expect will hold for some time in the future. 
C)  the inflation rate that is based on GDP growth. 
D)  the inflation rate minus the actual growth rate. 
A)  the inflation rate that governments require from year to year. 
B)  the inflation rate that consumers and businesses expect will hold for some time in the future. 
C)  the inflation rate that is based on GDP growth. 
D)  the inflation rate minus the actual growth rate.

Question 12

As of 2009,the average household earned $49,777.In 1979,the average household earned $16,461.Although it appears as though incomes have tripled,other prices have risen too.This illustrates a concept known as

Accepted Answer

A)  deflation. 
B)  disinflation. 
C)  money illusion. 
D)  COLA. 
A)  deflation. 
B)  disinflation. 
C)  money illusion. 
D)  COLA.

Question 13

Core inflation is defined as

Accepted Answer

A)  inflation that takes energy and food into account. 
B)  inflation that does not take energy and food into account. 
C)  inflation that takes health care and energy into account. 
D)  inflation that does not take health care and energy into account. 
A)  inflation that takes energy and food into account. 
B)  inflation that does not take energy and food into account. 
C)  inflation that takes health care and energy into account. 
D)  inflation that does not take health care and energy into account.

Question 14

The CPI measures the changes of one category of products.

Accepted Answer

A) True 
 B)False

Question 15

In the United States,inflation peaked around

Accepted Answer

A)  1980. 
B)  1982-1984. 
C)  1929. 
D) 1973. 
A)  1980. 
B)  1982-1984. 
C)  1929. 
D) 1973.

Question 16

Why does core inflation not include energy or food prices?

Accepted Answer

Calculations for core inflation do not i

Question 17

As an example of hyperinflation,one U.S.dollar was equal to _________ German marks in 1923,compared to 8.9 marks in 1919.

Accepted Answer

A)  0.001 
B)  1 
C)  1,000 
D)  1 trillion 
A)  0.001 
B)  1 
C)  1,000 
D)  1 trillion

Question 18

$$\begin{array}{l}
\begin{array} { | c | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Antonio's Nominal } \
\text { Hourly Wage }
\end{array} & \begin{array} { c } 
\text { Consumer Price } \
\text { Index }
\end{array} \
\hline 2006 & \$ 8.40 & 201.6 \
\hline 2010 & \$ 9.05 & 218.1 \
\hline
\end{array}\
\text { Table } 8.2
\end{array}$$ Refer to Table 8.2.From 2006 to 2010,Antonio received a total of $0.65 in pay raises,and the CPI also increased as shown in the table.What was Antonio's real wage in 2010,if 2006 is used as the base year?

Accepted Answer

A)  $8.40. 
B)  $9.05. 
C)  $9.09. 
D)  $8.37. 
A)  $8.40. 
B)  $9.05. 
C)  $9.09. 
D)  $8.37.

Question 19

In order to create an index for consumer prices,the BLS chose

Accepted Answer

A)  100 to represent the average 1982-1984 price level. 
B)  50 to represent the average 1982-1984 price level. 
C)  100 to represent the average 1972-1974 price level. 
D)  100 to represent the average 1992-1994 price level. 
A)  100 to represent the average 1982-1984 price level. 
B)  50 to represent the average 1982-1984 price level. 
C)  100 to represent the average 1972-1974 price level. 
D)  100 to represent the average 1992-1994 price level.

Question 20

Nominal increases take into account inflation adjustments over a period of time.

Accepted Answer

A) True 
 B)False

The formula for a real percentage change is

What does the phrase "owners' equivalent rent" mean?

An dollar-amount increase that has not been adjusted for inflation is called

Some goods have become less expensive due to

Good Price Increase since Last Year Amusement park tickets 5.0\% Bowling balls 4.2\% Camouflage neckties 3.1\% Table 8.1 Refer to Table 8.1,which gives hypothetical data on price changes for three goods.Which good(s)became relatively more expensive for buyers?

Real dollars are also called inflation-adjusted dollars.

Money illusion occurs

Year Antonio's Nominal Hourly Wage Consumer Price Index 2006 \ 8.40 201.6 2010 \ 9.05 218.1 Table 8.2 Refer to Table 8.2.From 2006 to 2010,Antonio received a total of $0.65 in pay raises,and the CPI also increased as shown in the table.What happened to Antonio's real wage from 2006 to 2010?

Which of the following countries has not experienced hyperinflation?

Disinflation is

Expected inflation is

As of 2009,the average household earned $49,777.In 1979,the average household earned $16,461.Although it appears as though incomes have tripled,other prices have risen too.This illustrates a concept known as

Core inflation is defined as

The CPI measures the changes of one category of products.

In the United States,inflation peaked around

Why does core inflation not include energy or food prices?

As an example of hyperinflation,one U.S.dollar was equal to _________ German marks in 1923,compared to 8.9 marks in 1919.

In order to create an index for consumer prices,the BLS chose

Nominal increases take into account inflation adjustments over a period of time.

Introduction

Demand and Supply: The Basics of the Market Economy

Market Equilibrium and Shifts

How Businesses Work

Competition and Market Power

Government and the Economy

The First Step Into Macroeconomics

Growth

Business Cycles, unemployment and Inflation

Fiscal Policy

Monetary Policy

The Financial Markets

International Trade

Technological Change

Economics of the Labor Market

The Distribution of Income

Economics of Retirement and Healthcare

Economics of Energy, the Environment, and Global Climate Change Glossary

Filters

Exam 8: Inflation

The formula for a real percentage change is

What does the phrase "owners' equivalent rent" mean?

An dollar-amount increase that has not been adjusted for inflation is called

Some goods have become less expensive due to

Good Price Increase since Last Year Amusement park tickets 5.0\% Bowling balls 4.2\% Camouflage neckties 3.1\% Table 8.1 Refer to Table 8.1,which gives hypothetical data on price changes for three goods.Which good(s)became relatively more expensive for buyers?

Real dollars are also called inflation-adjusted dollars.

Money illusion occurs

Year Antonio's Nominal Hourly Wage Consumer Price Index 2006 \ 8.40 201.6 2010 \ 9.05 218.1 Table 8.2 Refer to Table 8.2.From 2006 to 2010,Antonio received a total of $0.65 in pay raises,and the CPI also increased as shown in the table.What happened to Antonio's real wage from 2006 to 2010?

Which of the following countries has not experienced hyperinflation?

Disinflation is

Expected inflation is

As of 2009,the average household earned $49,777.In 1979,the average household earned $16,461.Although it appears as though incomes have tripled,other prices have risen too.This illustrates a concept known as

Core inflation is defined as

The CPI measures the changes of one category of products.

In the United States,inflation peaked around

Why does core inflation not include energy or food prices?

As an example of hyperinflation,one U.S.dollar was equal to _________ German marks in 1923,compared to 8.9 marks in 1919.

In order to create an index for consumer prices,the BLS chose

Nominal increases take into account inflation adjustments over a period of time.

Introduction

Demand and Supply: The Basics of the Market Economy

Market Equilibrium and Shifts

How Businesses Work

Competition and Market Power

Government and the Economy

The First Step Into Macroeconomics

Growth

Business Cycles, unemployment and Inflation

Fiscal Policy

Monetary Policy

The Financial Markets

International Trade

Technological Change

Economics of the Labor Market

The Distribution of Income

Economics of Retirement and Healthcare

Economics of Energy, the Environment, and Global Climate Change Glossary

Filters