chapter 12 macro economics

If the price level in 2016 is 140 and it falls to 133 in 2017, what has the economy experienced between 2016 and 2017?

5% deflation

Which of the following statements highlights the difference between the CPI (consumer price index) and the GDP deflator?

The CPI measures the average prices of goods and services consumed by typical consumers, whereas the GDP deflator measures the average prices of all goods and services in the economy

Which price index comprises the prices of all final goods and services produced within the economy

The GDP deflator

When the government of Zimbabwe ran out of money, President Robert Mugabe

printed more money

A measure of the average price received by suppliers is the

producer price index

Which price index measures prices of both intermediate and final goods

producer price index (PPI)

Refer to the CPI values in the table for the years 2005 to 2010. What was the approximate inflation rate over the period 2009 to 2010?

1.68%

If the average price level rises from 120 in year 1 to 130 in year 2, the inflation rate between years 1 and 2 will be

8.33%

To compare the $1-an-hour your grandfather earned in 1950 with the $8-an-hour you earn today, you would need to:

calculate real wages in both 1950 and today

The price level at the end of 2011 minus the price level at the end of 2010 is the _____ for the year 2011.

change in the price level

Which of the following is NOT a price index used by economists to measure inflation?

commodity. consumption indicator (CCI)

Which measure of the average price level most closely corresponds to a student's daily economic activities?

consumer price index

Which price index measures the average price for a basket of goods purchased by a typical American consumer

consumer price index

the average price for a basket of goods bought by a typical U.S. consumer is measured by the

consumer price index

The consumer price index measures the:

cost of living for a typical consumer

Which price index measures the average price received by suppliers?

the producer price index

When computing the consumer price index, the Bureau of Labor Statistics takes into account changes in the:

type of goods and the quality of goods

If a price index increased from 400 to 440 over the course of a year, then the inflation rate is:

10%

If the price level in 2018 is 150 and it rises to 165 in 2019, what is the rate of inflation between 2018 and 2019

10%

If the price level in the year 2000 is 100, and the price level in the year 2001 is 110, what is the inflation rate in 2001

10%

Suppose a nation's inflation rate is 5.8% from Year 1 to Year 2. If the CPI in Year 2 is 200, what was the CPI in Year 1?

189

From 2006 to 2016, the United States experienced average annual inflation of about

2.1%

If you had to predict the U.S. inflation rate for next year and decided that a good way to make that prediction would be simply to use the average inflation rate over the past 10 years, what would be your prediction for U.S. inflation next year?

2.1%

Suppose a nation's CPI is 150 in Year 1 and 180 in Year 2. What is the rate of inflation?

20%

Refer to the CPI values in the table for the years 2005 to 2010. In which year was the inflation rate the highest?

2008

Refer to the CPI values in the table for the years 2005 to 2010. In which year(s) did the country experience deflation?

2009 only

Refer to the CPI values in the table for the years 2005 to 2010. What was the approximate inflation rate over the period 2007 to 2008?

3.86%

Approximately how many prices of goods and services are measured by the CPI?

80,000

Which index measures price increases that typical American consumers face when shopping?

CPI

the ratio of nominal economic output to real economic output multiplied by 100 is the

GDP deflator

The consumer price index measures the prices of

a basket of goods bought by a typical American consumer

A real price is

a price that has been corrected for inflation

Inflation is

an increase in the average level of prices

Inflation is an increase in the:

average level of prices

Inflation refers to an increase in the:

average level of prices

The inflation rate is the rate of change of the

average level of prices

The consumer price index measures the:

average price of a basket of goods and services bought by a typical consumer.

Refer to the CPI values in the table for the years 2005 to 2010. In which year(s) did the country experience disinflation?

both 2007 and 2009

What do we call an increase in the average level of prices in an economy

inflation

The percentage increase in a price index from one year to the next is the:

inflation rate

The basket of goods bought by the average consumer

is changing all the time

The GDP deflator :

is the ratio of nominal GDP to Real GDP multiplied by 100

The GDP deflator

measures the average price of all final goods and services produced

Which of the following is NOT a price index often used to measure inflation?

net price index

Two of the challenging factors faced by the U.S. Bureau of Labor Statistics when computing the consumer price index are:

new goods and bette-quality goods

As a result of the changing variety and quality of goods that the typical consumer purchases each year, many economists argue that the consumer price index might:

overstate inflation

Which measure of prices includes all of the final goods and services in a nation's output?

the GDP deflator

Which of the three price indexes measures the average price level of the largest total number of goods

the GDP deflator

Inflation is best defined as an increase in

the average price level

Which of the following measures of inflation is based on a basket of goods and services for a typical household?

the consumer price index