Macroeconomics Unit 2 Quiz

What is the primary focus of the quiz in the video?

• Financial accounting principles

• Macroeconomics unit 2 topics

• Business management strategies

• Microeconomics concepts

Which of the following best describes the Consumer Price Index (CPI)?

• It tracks the market basket of specific consumer goods over time.

• It measures the change in prices of all consumer goods.

• It measures consumer spending and savings rates.

• It goes negative during deflation.

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

• Real GDP divided by nominal GDP times 100.

• Nominal GDP divided by real GDP times 100.

• Price of market basket in current year divided by price in base year times 100.

• Price of market basket in base year divided by price in current year times 100.

How does inflation affect the purchasing power of a currency?

• It has no effect on purchasing power.

• It stabilizes the purchasing power.

• It increases the purchasing power.

• It decreases the purchasing power.

What is disinflation?

• A complete halt in price changes.

• A decrease in the general price level.

• A slowdown in the rate of increase in prices.

• An increase in the general price level.

What happens to nominal interest rates during high inflation?

• They become negative.

• They increase.

• They remain unchanged.

• They decrease.

According to the Quantity Theory of Money, what happens if the money supply increases?

• Real GDP decreases.

• Nominal GDP increases.

• Velocity of money decreases.

• Unemployment rate doubles.

What does the GDP deflator measure?

• The unemployment rate in the economy.

• The velocity of money in circulation.

• The change in prices of a specific market basket.

• The ratio of nominal GDP to real GDP times 100.

Which of the following is NOT a criticism of how the government measures the economy?

• Real GDP doesn't measure income distribution.

• Official unemployment rates exclude discouraged workers.

• CPI doesn't include the newest products.

• Real GDP overstates economic growth as it doesn't account for price level changes.

What does a GDP deflator of 120 indicate?

• Prices have decreased by 20% since the base year.

• Prices have increased by 20% since the base year.

• Prices have doubled since the base year.

• Prices have remained constant since the base year.