Question 1

A decrease in the price of domestically produced industrial robots will be reflected in

Accepted Answer

A)  both the GDP deflator and the consumer price index.
B)  neither the GDP deflator nor the consumer price index.
C)  the GDP deflator but not in the consumer price index.
D)  the consumer price index but not in the GDP deflator.E) C) and D)
F) All of the above

Question 2

When looking at a graph of nominal and real interest rates you notice that nominal rates always lie above real rates.From this you conclude

Accepted Answer

A)  there were serious episodes of deflation in the time frame represented on the graph.
B)  consumer prices were always rising in the time frame represented on the graph.
C)  the economy never experienced a recession in the time frame represented on the graph.
D)  GDP was always increasing for the time frame represented on the graph.E) A) and B)
F) A) and C)

Question 3

The CPI was 120 in 2008 and 126 in 2009.Phil borrowed money in 2008 and repaid the loan in 2009.If the nominal interest rate on the loan was 8 percent,then the real interest rate was

Accepted Answer

A)  -2 percent.
B)  3 percent.
C)  5 percent.
D)  13 percent.E) C) and D)
F) All of the above

Question 4

Economists use the term inflation to describe a situation in which the economy's overall price level is rising.

Accepted Answer

A) True 
 B)False

Question 5

The inflation rate is the absolute change in the price level from the previous period.

Accepted Answer

A) True 
 B)False

Question 6

The real interest rate is the interest rate corrected for inflation.

Accepted Answer

A) True 
 B)False

Question 7

Inflation can be measured using either the GDP deflator or the consumer price index.

Accepted Answer

A) True 
 B)False

Question 8

If 2004 is the base year,then the inflation rate for 2005 equals

Accepted Answer

A)     CPI in 2005−CPI in 2004 CPI in 2004×100\frac{	ext { CPI in } 2005-\mathrm{CPI} 	ext { in } 2004}{	ext { CPI in } 2004} 	imes 100 CPI in 2004 CPI in 2005−CPI in 2004​×100 
B)     CPI in 2005− CPI in 2004 CPI in 2005×100.\frac { 	ext { CPI in } 2005 - 	ext { CPI in } 2004 } { 	ext { CPI in } 2005 } 	imes 100 . CPI in 2005 CPI in 2005− CPI in 2004​×100. 
C)     CPI in 2004− CPI in 2005 CPI in 2004×100.\frac { 	ext { CPI in } 2004 - 	ext { CPI in } 2005 } { 	ext { CPI in } 2004 } 	imes 100 . CPI in 2004 CPI in 2004− CPI in 2005​×100. 
D)     CPI in 2004− CPI in 2005 CPI in 2005×100\frac { 	ext { CPI in } 2004 - 	ext { CPI in } 2005 } { 	ext { CPI in } 2005 } 	imes 100 CPI in 2005 CPI in 2004− CPI in 2005​×100E) B) and C)
F) A) and D)

Question 9

Suppose the price index was 105 in 2007,115.5 in 2008,and the inflation rate was lower between 2008 and 2009 than it was between 2007 and 2008.This means that

Accepted Answer

A)  the price index in 2009 was lower than 115.5.
B)  the price index in 2009 was lower than 126.
C)  the price index in 2009 was lower than 127.05.
D)  the inflation rate between 2008 and 2009 was lower than 1.1 percent.E) A) and D)
F) A) and B)

Exam 24: Measuring the Cost of Living

The inflation rate is the absolute change in the price level from the previous period.

Correct Answer
verified

If 2004 is the base year,then the inflation rate for 2005 equals

Correct Answer
verified

Suppose the price index was 105 in 2007,115.5 in 2008,and the inflation rate was lower between 2008 and 2009 than it was between 2007 and 2008.This means that

Correct Answer
verified

Inflation can be measured using either the GDP deflator or the consumer price index.

Correct Answer
verified

The real interest rate is the interest rate corrected for inflation.

Correct Answer
verified

A decrease in the price of domestically produced industrial robots will be reflected in

Correct Answer
verified

Economists use the term inflation to describe a situation in which the economy's overall price level is rising.

Correct Answer
verified

When looking at a graph of nominal and real interest rates you notice that nominal rates always lie above real rates.From this you conclude

Correct Answer
verified

The CPI was 120 in 2008 and 126 in 2009.Phil borrowed money in 2008 and repaid the loan in 2009.If the nominal interest rate on the loan was 8 percent,then the real interest rate was

Correct Answer
verified

Exam 24: Measuring the Cost of Living

The inflation rate is the absolute change in the price level from the previous period.

Correct AnswerverifiedShow Answer

If 2004 is the base year,then the inflation rate for 2005 equals

Correct AnswerverifiedShow Answer

Suppose the price index was 105 in 2007,115.5 in 2008,and the inflation rate was lower between 2008 and 2009 than it was between 2007 and 2008.This means that

Correct AnswerverifiedShow Answer

Inflation can be measured using either the GDP deflator or the consumer price index.

Correct AnswerverifiedShow Answer

The real interest rate is the interest rate corrected for inflation.

Correct AnswerverifiedShow Answer

A decrease in the price of domestically produced industrial robots will be reflected in

Correct AnswerverifiedShow Answer

Economists use the term inflation to describe a situation in which the economy's overall price level is rising.

Correct AnswerverifiedShow Answer

When looking at a graph of nominal and real interest rates you notice that nominal rates always lie above real rates.From this you conclude

Correct AnswerverifiedShow Answer

The CPI was 120 in 2008 and 126 in 2009.Phil borrowed money in 2008 and repaid the loan in 2009.If the nominal interest rate on the loan was 8 percent,then the real interest rate was

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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