AGEC 330 - Quiz 12
What is the real price of an apple in 5 years if the nominal price is $1.16, and the inflation rate is 3%? $1.00 $1.16 $1.35 $1.13
$1.00
What is the nominal price of an apple in 10 years if the real price is 1$, and the inflation rate is 3%? $0.74 $1.34 $1.06 $1.00
$1.34
What is the nominal price of an orange in 5 years if the real price is $1.50, and the inflation rate is 4%? $1.82 $1.50 $1.23 $1.44
$1.82
What is the real price of a tractor in 7 years if the real price is $150,000, and the inflation rate is 4%? $113,987.67 $150,000.00 $144,000.00 $197,389.77
$113,987.67
What is the real price of a truck in 15 years if the nominal price is $30,000, and the inflation rate is 3%? $29,100.00 $46,739.02 $30,000.00 $19,255.86
$19,255.86
What is the nominal price of a tractor in 7 years if the real price is $200,000, and the inflation rate is 4%? $200,000.00 $192,000.00 $263,186.36 $151,982.56
$263,186.36
What is the nominal price of an apple in 15 years if the real price is $2.5, and the inflation rate is 2%? $3.36 $2.36 $3.30 $2.55
$3.36
What is the nominal price of a truck in 15 years if the real price is $25,000, and the inflation rate is 3%? $38,949.19 $25,000.00 $24,250.00 $16,046.55
$38,949.19
What is the nominal price of an orange in 25 years if the real price is $3, and the inflation rate is 2.5%? $3.08 $5.43 $4.56 $5.56
$5.56
The real interest rate on a bond is 10% and the inflation is expected to be 2%. What is the nominal interest rate on the bond? 9.09% 12% 8% 12.2%
12.2%
The real interest rate on a bond is 8% and the inflation is expected to be 4%. What is the nominal interest rate on the bond? 12.36% 3.85% 8% 4%
12.36%
The real interest rate on a bond is 12% and the inflation is expected to be 3%. What is the nominal interest rate on the bond? 9% 15.36% 8.74% 12%
15.36%
The yield on a bond is 6% and inflation is expected to be 3%. Calculate the real interest rate on the bond. 2.83% 2.91% 3.09% 3%
2.91%
The yield on a bond is 8% and inflation is expected to be 4%. Calculate the real interest rate on the bond. 4% 3.70% 3.85% 4.17%
3.85%
The yield on a bond is 15% and inflation is expected to be 5%. Calculate the real interest rate on the bond. 10% 8.69% 10.53% 9.52%
9.52%
The yield (interest rate) on a bond is 12.5% and the inflation is expected to be 2.5%. What's the real interest rate on the bond? 5% 9.76% 10% 12.19%
9.76%
Which of the followings has nothing to do with inflation? Increase in the general price level Can be measured by CPI Decrease in the general price level Can be caused by an increase in money supply 7
Decrease in the general price level
___________ are prices that reflect today's purchasing power. Nominal Prices Actual Prices Real Prices Stock Prices
Real Prices
Inflation refers to an increase in all the general level of prices for all goods and services in an economy.
True
Deflation is the ________ in all the general level of prices for all goods and services in an economy.
decrease
Cash flows stated in real dollars over time can be converted to nominal dollars; however, cash flows stated in nominal dollars over time cannot be converted to real dollars.
false
Cash flows stated in real dollars over time cannot be converted to nominal dollars.
false
Deflation is the increase in the general price level.
false
If the nominal price of an apple is $1 five years from today and the inflation rate is positive, then the price of an apple today is also $1.
false
If the real price of an apple is $1 five years from today, then the price of an apple today is less than $1.
false
Inflation is an increase in the general level of prices and quantities for all goods and services in an economy.
false
Inflation is the decrease in the general price level.
false
Inflation refers to a decrease in all the general level of prices for all goods and services in an economy.
false
Nominal Prices are the prices with the general price level effect removed.
false
Real Prices are the prices as you observe them (actual amount of U.S. currency (or other types of currency) making up the cash flows).
false
Real Prices are the prices that do not reflect today's purchasing power.
false
The nominal interest rate does not account for the loss of value due to inflation.
false
The nominal interest rate does not account for the time value of money and the loss of value due to inflation.
false
The only way to measure inflation is by the Consumer Price Index (CPI).
false
The only way to measure inflation is with the Gross Domestic Product (GDP) Deflator.
false
The real interest rate accounts for the loss of value due to inflation.
false
The real interest rate does not account for the time value of money.
false
Inflation refers to a/an __________ in all the general level of prices for all goods and services in an economy. Increase Decrease None of the above
increase
In United States, the consumer price index and gross national product are commonly used measures to measure ______. Inflation Deflation None of the above
inflation
Cash flows stated in nominal dollars over time can be converted to real dollars.
true
Cash flows stated in real dollars over time can be converted to nominal dollars.
true
Deflation is the decrease in the general price level.
true
Inflation is an increase in the general level of prices for all goods and services in an economy.
true
Inflation is the increase in the general price level.
true
Nominal Prices are the prices as you observe them.
true
Rate of Inflation is the percentage rate of increase in inflation.
true
Real Prices are the prices that reflect today's purchasing power at a specific point in time.
true
Real Prices are the prices that reflect today's purchasing power.
true
Real Prices are the prices with the general price level effect removed.
true
The nominal interest rate accounts for the time value of money and the loss of value due to inflation.
true
The real interest rate accounts for the time value of money.
true
The two indices to measure inflation are the Consumer Price Index (CPI) and the Gross Domestic Product (GDP) Deflator.
true
