Econ 12 Study Guide

The table shows consumer price index data for the United Kingdom. Based on this information, what is the rate of inflation in 2016?

1%

If you see that the consumer price index this year is lower than the consumer price index last year, this means that:

on average, prices went down across the economy

Which of the following lists the functions of money?

medium of exchange, store of value, and unit of account

Money illusion is the:

tendency to focus on nominal values instead of inflation-adjusted values

In 1971, the cost of a four-year college degree from a public university was about $1,410. The consumer price index was 40.48 in January 1971. If the current consumer price index is 251.1, what is the approximate cost of the four-year degree in current dollars?

$8,746

You purchase a certificate of deposit that earns an advertised rate of 1.75% interest per year. What is your real rate of return if the actual inflation rate is 1.9%?

-0.15%

You purchase a certificate of deposit and expect an inflation rate of 1.5% over the next year. Your nominal rate of interest is 2.25%. What is your expected real rate of return?

0.75%

You purchase a certificate of deposit and expect an inflation rate of 1.25% over the next year. Your nominal rate of interest is 2.1%. What is your expected real rate of return?

0.85%

what is sri lanka's GDP deflator if its nominal GDP is $88.9 billion (in current US$) and the real GDP is $59.34 billion?

149.8

The table shows consumer price index data for the United States. Based on this information, what is the rate of inflation in 2006?

3.22%

Menu costs are the:

marginal costs of adjusting prices

The real interest rate is the:

nominal interest rate minus the rate of inflation

what is uganda's real GDP if its nominal GDP is $27.5 billion (in current US$) and the GDP deflator is 163.4?

$16.8 billion

In 1995, when the consumer price index was 152.38, women earned a median income of $12,130 per year. If the consumer price index in 2015 was 236.99, how much was $12,130 in 2015 dollars?

$18,865

Consider the following basket of goods: 50 bottles of milk, 100 avocadoes, 50 apples, and eight pineapples. Suppose that last year, each bottle of milk was $2.50, each avocado was $1.50, each apple was $0.75, and each pineapple was $4. This year, each bottle of milk is $2.50, each avocado is $1.80, each apple is $0.80, and each pineapple is $4.30. What is the inflation rate between last year and this year?

10.13%

the table shows consumer price index for the united states. based on this information, what is the rate of inflation in 1991?

4.22%

Which of the following shows the medium of exchange function of money?

Daniela goes to the store and purchases roses with U.S dollars

Hyperinflation is:

extremely high rates of inflation

Which of the following correctly shows the steps needed to calculate the inflation rate?

find out what people typically buy, collect the prices from the stores where people shop, tally up the cost of the basket of goods and services, and calculate the inflation rate

if you see that inflation between last year and this year is 3%, this means that:

on average, prices went up across the economy by 3%

the GDP deflator is an index that tracks the:

price of all goods and services produced domestically