Inflation and CPI MACRO

Which of the following measures inflation?

• Consumer Price Index (CPI)

• Change in Product and Inflation (CPI)

• Office of Management and Budget (OMB)

• Congressional Budget Office (CBO)

Defined as the ups and downs of the economy (inflation rises during the expansion part of this).

• Business cycle

• Political socialization

• Fiscal policy

• Monetary policy

A general increase in prices is called

• inflation

• purchasing power

• the CPI

• a price index

Inflation reduced people's purchasing power because

• the same amount of money buys ore goods and services

• the same amount of money buys fewer goods and services

• the market basket has to be changed every year

• there is not enough money in the economy

The inflation rate is

• the ability to buy goods or services

• measured in fixed dollars

• not an important measure to economists

• the percentage change in prices over time

GDP that is adjusted for inflation

• real GDP

• nominal GDP

• price level

• net national product

GDP that is NOT adjusted for inflation

• real GDP

• nominal GDP

• price level

• net national product

__________ are common products that consumers buy in a month.(used for CPI)

• market basket

• inflation

• fiscal policies

• monetary policy

Optimal rate of inflation is approximately ___.

• 10%

• 2%

• 5%

• 7%

___ tends to foreshadow what CPI will do.

• Fiscal policy

• PPI

• Hyperinflation

• FBI