practicequestions5fall2004

practicequestions5fall2004 - Econ 102 Fall 2004 Practice...

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Fall 2004 Practice Questions 5 Readings Chapter 6, Appendix to Chapter 6 Concepts: CPI Inflation Nominal and Real Wage I. Multiple Choices: 1) Which of the following statements about the Consumer Price Index (CPI) is not true? a. The CPI is an index that tracks the prices of all the goods produced in a country during a defined period of time. b. The CPI is always equal to 100 in the base year. c. The CPI is used to translate nominal variables into real variables. d. The CPI tracks the change in the average price level for a set of goods consumers purchase. 2) The CPI in Italy was 150 at the end of year 2000 and 156 at the end of year 2001. What was the inflation rate in Italy in 2001? a. 6% b. 4% c. 2% d. 56% 3) Consider the following information about the CPI in the country of Myland: CPI (base 2000) CPI (base 2001) 2000 100 84.246 2001 118.7 100 The inflation rate in 2001 computed using the CPI (base 2000) is: a. Higher than the inflation rate computed using the CPI (base 2001). b. Lower than the inflation rate computed using the CPI (base 2001). c. The same as the inflation rate computed using the CPI (base 2001). d.
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practicequestions5fall2004 - Econ 102 Fall 2004 Practice...

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