Macro Unit 2- Practice Questions #2

The video tutorial covers multiple choice questions on economic concepts such as the Consumer Price Index (CPI), inflation, and the GDP deflator. It explains how these indices are calculated and their implications on purchasing power and economic growth. The tutorial also discusses the quantity theory of money and critiques common economic measures.

What is the Consumer Price Index (CPI) and how does it measure price changes over time?

Explain how inflation affects the purchasing power of a currency.

Define disinflation and how it differs from deflation.

What is the formula for calculating the Consumer Price Index (CPI)?

Describe the Quantity Theory of Money and its implications for nominal GDP.

What is the GDP deflator and how is it calculated?

Discuss the criticisms of how the government measures real GDP.