84. In the United States, if the price of imported oil rises so that the price of gasoline and heating oil rise the

B.consumer price index rises much more than does the GDP deflator .

A.GDP deflator rises much more than does the consumer price index.

C. GDP deflator and the consumer price index rise by about the same amount.

D.consumer price index rises slightly more than does the GDP deflator .

85. Most, but not all, athletic apparel sold in the United States is imported from other nations. If the price of athletic apparel increases, the GDP deflator will

A.increase less than will the consumer price index.

B.increase more than will the consumer price index.

C. not increase, but the consumer price index will increase.

86. Suppose that U.S. mining companies purchase German-made ore trucks at a reduced price. By itself what will this do to the GDP deflator and the consumer price index?

B.The consumer price index and the GDP deflator will be unaffect.

A.The consumer price index will fall, and the GDP deflator will fall.

C. The consumer price index will fall, and the GDP deflator will be unaffect.

D.The consumer price index will be unaffect, and the GDP deflator will fall.

87. If the price of U.S.-made power tools increases, the consumer price index

A.and the GDP deflator will both increase.

B.will increase, and the GDP deflator will be unaffect.

C. will be unaffect, and the GDP deflator will increase.

D.and the GDP deflator will both be unaffect.

88. The price of imported athletic shoes produced by a U.S. company operating in Thailand increases. By itself what effect will this change have on the GDP deflator and on the CPI?

D.The GDP deflator will be unaffect and the CPI will increase.

A.The GDP deflator and the CPI will both increase.

B.The GDP deflator will increase and the CPI will be unaffect.

C. The GDP deflator and the CPI will both be unaffect.

89. A Brazilian company produces soccer balls in the United States and exports all of them. If the price of the soccer balls increases, the GDP deflator

C. increases and the CPI is unchangeD.

B.is unchanged and the CPI increases.

90. A German automobile company produces cars in the United States, some of which are exported to other nations. If the price of these cars increases, the GDP deflator

A.and the CPI will both increase.

B.will increase and the CPI will be unchangeD.

C. will be unchanged and the CPI will increase.

D.and the CPI will both be unchangeD.

91. The price of CD players increases dramatically, causing a 1 percent increase in the CPI. The price increase will most likely cause the GDP deflator to increase by

D.It is impossible to make an informed guess without more information.

92. In general, if a consumer good is produced domestically and consumed domestically, a reduction in its price will have which of the following effect?

A.The consumer price index will decrease relatively more than the GDP deflator will.

B.The consumer price index and the GDP deflator will decrease by the same amount.

C. The consumer price index will decrease relatively less than the GDP deflator will.

D.One cannot generalize about the relative decrease in the two price indices.

93. If increases in the prices of U.S. medical care cause the CPI to increase by 2 percent, the GDP deflator will likely increase by

D.All of the above are correct.

94. Which is the most accurate statement about the GDP deflator and the consumer price index?

B.The consumer price index compares the price of a fixed basket of goods and services to the price of the basket in the base year, but the GDP deflator compares the price of currently produced goods and services to the price of the same goods and services in the base year.

A.The GDP deflator compares the price of a fixed basket of goods and services to the price of the basket in the base year, but the consumer price index compares the price of currently produced goods and services to the price of the same goods and services in the base year.

C. Both the GDP deflator and the consumer price index compare the price of a fixed basket of goods and services to the price of the basket in the base year.

D.Both the GDP deflator and the consumer price index compare the price of currently produced goods and services to the price of the same goods and services in the base year.

95. The basket of goods in the consumer price index changes

C. occasionally while the basket of goods used to compute the GDP deflator changes yearly.

A.occasionally, as does the basket of goods used to compute the GDP deflator .

B.yearly, as does the basket of goods used to compute the GDP deflator .

D.yearly while the basket of goods used to compute the GDP deflator changes occasionally.

97. The CPI and the GDP deflator

B.generally show different patterns of movement.

C. always show identical changes.

D.always show different patterns of movement.

98. What is the purpose of measuring the overall level of prices in the economy?

C. to allow comparison between dollar figures from different points in time

A.to allow the measurement of GDP

B.to allow consumers to know what kinds of prices to expect in the future

D.to allow government officials to determine whether the value of the dollar has increased or decreased

100. In 1931, President Herbert Hoover was paid a salary of $75,000. The price index for 1931 is 15.2, and the price index for 2001 is 177. The President’s salary today is $400,000

C. President Hoover's salary equivalent in 2001 dollars is much larger than that of the current U.S. president.

A.President Hoover's salary equivalent in 2001 dollars is much smaller than that of the current U.S. president.

B.President Hoover's salary equivalent in 2001 dollars is about the same as that of the current U.S. president.

D.One cannot make a meaningful comparison of 2001 salaries and 1931 salaries.

121. A COLA automatically raises the wage rate when

B.the consumer price index increases.

D.the consumer price index is announceD.

122. Indexation refers to:

B.using a law or contract to automatically correct a dollar amount for the effect of inflation.

A.a process of adjusting the nominal interest rate so that it is equal to the real interest rate.

C. using a price index to deflflate dollar values.

D.an adjustment made by the Bureau of Labor Statistics to the CPI so that the index is in line with the GDP deflator .

126. Of Social Security benefit, and federal income tax brackets, which is indexed?

C. only federal income tax brackets

127. Interest represents a payment

A. now for money to be transferred in the future.

B. in the future for a transfer of money in the past.

C. in the past for money transferred now.

D.All of the above are correct.

128. Which is the most accurate statement about the relationship between inflation and interest rates?

D.In order to fully understand interest rates, we need to know how to correct for the effect of inflation.

A.There is no relationship between inflation and interest rates.

B.The interest rate is determined by the rate of inflation.

C. In order to fully understand inflation, we need to know how to correct for the effect of interest rates.

129. Which of the following is the most accurate statement about the relationship between the nominal interest rate and the real interest rate?

B.The real interest rate is the nominal interest rate minus the rate of inflation.

A.The real interest rate is the nominal interest rate times the rate of inflation.

C. The real interest rate is the nominal interest rate plus the rate of inflation.

D.The real interest rate is the nominal interest rate divided by the rate of inflation.

133. The nominal interest rate tells you

A.how fast the number of dollars in your bank account rises over time.

B.how fast the purchasing power of your bank account rises over time.

C. the number of dollars in your bank account.

134. The real interest rate tells you

B.how fast the purchasing power of your bank account rises over time.

A.how fast the number of dollars in your bank account rises over time.

C. the number of dollars in your bank account.

D.the purchasing power of your bank account.

135. Which of the following is the most accurate statement about nominal and real interest rates?

C. Nominal and real interest rates often do not move together.

A.Nominal and real interest rates always move together.

B.Nominal and real interest rates never move together.

C. Nominal and real interest rates often do not move together.

136. Which of the following is the most accurate statement about real and nominal interest rates?

A.Real interest rates can be either positive or negative, but nominal interest rates must be positive.

B.Real interest rates and nominal interest rates must be positive.

C. Real interest rates must be positive, but nominal interest rates can be either positive or negative.

D.Real interest rates and nominal interest rates can be either positive or negative.

150. In the late 1970s, nominal interest rates were high and inflation rates were very high. As a result, real interest rates were

C. low, and in some years they were negative.

Chapter 24 (B)

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Hằng Nguyễn

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48 questions

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MULTIPLE CHOICE QUESTION

2 mins • 1 pt

76. Recent changes in methods used to compute the CPI have

A.increased the upward bias in the CPI inflation rate.

B.reduced the upward bias in the CPI inflation rate.

C. increased the downward bias in the CPI inflation rate.

D.reduced the downward bias in the CPI inflation rate.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

77. The measurement problems in the consumer price index as an indicator of the cost of living are important because

A.high rates of inflation cause voters to become unhappy.

B.politicians have manipulated the measurement problems to their advantage.

C. many government programs use the CPI to adjust for changes in the overall level of prices.

D.if the price level is overstated consumers will be taken advantage of by sellers of consumer goods.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

78. The GDP deflator reflects the

A.level of prices in the base year relative to the current level of prices.

B.current level of prices relative to the level of prices in the base year.

C. level of real output in the base year relative to the current level of real output.

D.current level of real output relative to the level of real output in the base year.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

79. An important difference between the GDP deflator and the consumer price index is that

A.the GDP deflator reflect s the prices of goods and services bought by producers, whereas the consumer price index reflect s the prices of goods and services bought by consumers.

B.the GDP deflator reflect s the prices of all final goods and services produced domestically, whereas the consumer price index reflect s the prices of some goods and services bought by consumers.

C. the GDP deflator reflect s the prices of all final goods and services produced by a nation's citizens, whereas the consumer price index reflect s the prices of final goods and services bought by consumers.

D.the GDP deflator reflect s the prices of all goods and services bought by producers and consumers, whereas the consumer price index reflect s the prices of final goods and services bought by consumers.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

80. If the prices of Australian-made shoes imported into the United States increase,

A.both the GDP deflator and the consumer price index will increase.

B.neither the GDP deflator nor the consumer price index will increase.

C. the GDP deflator will increase but the consumer price index will not increase.

D.the consumer price index will increase, but the GDP deflator will not increase.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

81. An increase in the price of domestically produced industrial robots will be reflected in

A.both the GDP deflator and the consumer price index.

B.neither the GDP deflator nor the consumer price index.

C. the GDP deflator but not in the consumer price index.

D.the consumer price index but not in the GDP deflator .

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

82. By itself a reduction in the price of large tractors imported into the United States from Russia will

A.make the GDP deflator decrease and the consumer price index to increase.

B.make the GDP deflator increase, but the consumer price index is unchangeD.

C. will increase both the GDP deflator and the consumer price index.

D.will not change either the GDP deflator or the consumer price index.

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Chapter 24 (B)

48 questions

76. Recent changes in methods used to compute the CPI have

77. The measurement problems in the consumer price index as an indicator of the cost of living are important because

78. The GDP deflator reflects the

79. An important difference between the GDP deflator and the consumer price index is that

80. If the prices of Australian-made shoes imported into the United States increase,

81. An increase in the price of domestically produced industrial robots will be reflected in

82. By itself a reduction in the price of large tractors imported into the United States from Russia will

83. An increase in the price of dairy products produced domestically will be reflect ed in

84. In the United States, if the price of imported oil rises so that the price of gasoline and heating oil rise the

85. Most, but not all, athletic apparel sold in the United States is imported from other nations. If the price of athletic apparel increases, the GDP deflator will

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