NEW
Font size
WorksheetsBusiness Economics | 11.19 BW
Total questions: 8
Worksheet time: 4mins
Which of the following most accurately describes comparing past and current prices?
Adjusting for inflation eliminates all problems with comparing prices over time
Adjusting for inflation is easier when many new products have been invented in the last 5 years
Inflation adjusted prices do not fully capture innovation or quality changes
No changes need to be made to compare past and current prices
The CPI in 1979 was 72.6 and in 1980 the CPI was 82.4. Which of the following is TRUE?
Orginial ValueNew Value − Original Value
The deflation rate was 11.9% in 1980
The deflation rate was 13.5% in 1980
The inflation rate was 11.9% in 1980
The inflation rate was 13.5% rate in 1980
How does the introduction of new goods and services impact the calculation of the CPI?
New goods and services bias the CPI downwards.
New goods and services bias the CPI upwards.
New goods and services do not impact the calculation of CPI.
If I deposit 100 dollars in the bank and the bank agrees to give me a dollar after a year in interest on that 100 dollars, what is the interest rate?
0.1%
1%
10%
100%
If the inflation rate is 5% and the nominal interest rate is 7%, what is the real interest rate?
2%
5%
7%
12%
If the nominal interest rate is 8%, and the real interest rate is 1%, what is the rate of inflation?
1%
7%
8%
9%
If inflation is 4% and your boss gives you a 2% raise, which of the following is TRUE?
Your nominal wage decreased
Your real wage increased
Your purchasing power decreased
Your effective wage remains the same
The inflation rate is 10%, how much of a raise would you need to receive for your real wages to stay the same?
1%
5%
10%
7%
