set 6
If the nominal interest rate is 2.5 percent and the inflation rate is 2 percent, what is the real interest rate?
.5 percent
Suppose a basket of goods and services has been selected to calculate the CPI and 2014 has been selected as the base year. In 2012, the basket's cost was $50; in 2014, the basket's cost was $52; and in 2016, the basket's cost was $58. The value of the CPI in 2016 was
111.5.
Table 24-4 The table below pertains to Studious, an economy in which the typical consumer's basket consists of 5 books and 10 calculators. Year Price of a Book Price of a Calculator 2012 $24 $9 2013 $30 $11 2014 $32 $12 74. Refer to Table 24-4. The inflation rate was
23.8 percent in 2013 and 7.7 percent in 2014
The price index was 170 in the first year, 180 in the second year, and 195 in the third year. The inflation rate was about
5.9 percent between the first and second years, and 8.3 percent between the second and third years.
Refer to Figure 26-4. Regard the position of the Supply curve as fixed, as on the graph. If the real interest rate is 8 percent, the inflation rate is 3 percent, and the market for loanable funds is in equilibrium, then the position of the demand-for-loanable-funds curve must be
D2
If a U.S. company buys an electrical generator made in Japan by a Japanese firm, and the Japanese firm uses the payment to buy stocks issued by a U.S. company then
U.S. imports but not U.S. exports increase.
The goal of the consumer price index is to measure changes in the
cost of living
Technological knowledge refers to
available information on how to produce things
Table 24-5 The table below pertains to Wrexington, an economy in which the typical consumer's basket consists of 20 pounds of meat and 10 toys. Year Price of Meat Price of a Toy 2004 $3 per pound $2 2005 $1 per pound $7 2006 $4 per pound $5 73. Refer to Table 24-5. The inflation rate was
positive in 2005 and positive in 2006.
If total spending rises from one year to the next, then which of the following could not be true?
the economy is producing a smaller output of goods and services, and goods and services are selling at lower prices.
