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Inflation Measurement and Adjustment: Homework Help Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. How is a person's likelihood to save related to the simple spending multiplier?

Question 2 2. If nominal GDP increased by 5.1% and real GDP increased by 2.5% last year, which of the following is TRUE?

Question 3 3. If Mary's nominal income rises by 4%, while her real income fell by 2%, what happens to the level of prices?

Question 4 4. How do economists illustrate stagflation?

Question 5 5. Which one of these scenarios would cause Cost-Push Inflation?

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Question 6 6. How does the multiplier effect resemble a ripple effect through the economy?

Question 7 7. Using the chart below, which statement is true regarding wages over the three year period?

Question 8 8. Which of the following statements is FALSE regarding the Substitution Bias?

Question 9 9. What is the value of using real GDP?

Question 10 10. In year one, a worker's nominal wage is $25,000, and the CPI is 100. The following year, the worker's nominal wages stay the same, but the CPI is 105. In order to calculate the worker's real wage in year two, what needs to be done?

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Question 11 11. Why is the GDP deflator considered superior to the consumer price index?

Question 12 12. Why might a national wheat plague cause cost-push inflation?

Question 13 13. What are the two reasons that economic output can increase?

Question 14 14. Melissa has a choice between two jobs. The first is a job is in New York City with a salary of $90,000. The other job has a salary of $80,000 per year salary in Boise, Idaho. Let's assume that the CPI is 120 in New York, while the CPI is 100 in Boise. If Melissa wants to maximize her 'real wage', which job should she choose?

Question 15 15. A retired woman lives entirely on Social Security income, while a farmer borrows money to buy a new tractor. How would inflation affect them?

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Question 16 16. How is real GDP calculated?

Question 17 17. If $100 of new private investment gets added to the economy, and the marginal propensity to consume is 0.80, by how much will aggregate demand increase?

Question 18 18. Real GDP evaluates _____ production at _____ prices.

Question 19 19. If the consumer price index is equal to 100 in year 1, and 103 in year 2, what does this mean?

Question 20 20. What happens if the rate of inflation as reported by the Consumer Price Index is 3%?

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Question 21 21. What is the nominal gross domestic product?

Question 22 22. Demand-Pull Inflation is illustrated by which of the following?

Question 23 23. In year one, nominal GDP is $5,000, while real GDP is $4,500. In year two, nominal GDP is $5,500, while real GDP is $4,800. What was the growth rate of real GDP between years one and two?

Question 24 24.

Susie lives in Arkansas and she is in the market for a new car just released by XYZ Car Company. Susie is finding out that the car is in very high demand, and she has seen the price on the car rise twice since she started shopping around. Alan lives in California and he is in the market for the new tablet released by ABC Electronics. Alan is finding out the tablet is hard to get a hold of because it is in such high demand, and the price keeps rising on the tablet at all the retailers Alan is visiting. Rachel lives in New York and she is the market for new leather jacket put out by her favorite clothing line. Rachel is realizing that this is the case for many in New York and so the cost keeps increasing for this leather jacket she wants.

What is the above scenario an example of?

Question 25 25. Which of the following is a cause of Cost-Push Inflation?

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Question 26 26. What does the GDP deflator represent?

Question 27 27. What happens when actual inflation is higher than expected inflation?

Question 28 28. Cost-push inflation occurs when _____.

Question 29 29. What is the formula needed to calculate real GDP growth rate?

Question 30 30. If the Consumer Price Index rises from 101 to 104, which of the following statements is true?

Inflation Measurement and Adjustment: Homework Help Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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