7.2 and 7.5 Study Guide

Is Nominal GDP better than Real GDP for measuring actual growth?

• True

• False

Which of the following is NOT a problem with CPI?

• Substitution Bias

• New Products

• Product Inequality

• Product Quality

Does Real GDP adjust for inflation?

• True

• False

What is the CPI formula?

• CPI = Price of market basket in base year/Price of market basket x 100

• CPI = Price of market basket in base year/Price of market basket

• CPL = Price of market basket/Price of market basket in base year x 100

• CPI = Price of market basket/Price of market basket in base year x 100

Which of the following is helped by inflation?

• Lenders

• People with fixed incomes

• Borrowers

• Savers

Is an elderly couple living off fixed retirement payments of $2000 a month helped by inflation?

• True

• False

What term means wage measured by dollars rather than purchasing power?

• Nominal Wage

• Real Wage

• Nominal GDP

• Real GDP

Does inflation mean rising general level of prices and increasing the “purchasing power” of money?

• False

• True

Find the value of the market basket in 2023

• 1,780

• 1,310

• 1,490

• 2,290

Find the value of the market basket in 2022

• 1,780

• 1,310

• 1,490

• 2,290