Page 1 ECO 2013 Principles of Macroeconomics Practice Exam #2 (Chapters 6-9) Professor Alvin Chiang Name: __________________________ Date: ____________________________ Panther ID: ______________________ Directions: Please fill out and bubble in your name (last name, first name) and Panther ID (under the Identification section) on the provided Scantron. You will have from 3:30 PM - 4:45 PM to answer all 50 questions. Clearly mark your answers on the Scantron and be sure to erase any stray marks.
___ 1.Arlina got a 5% raise while the rate of inflation was 6%. Arlina's standard of living:
A) rose by about 1%. B) rose by about 2%. C) fell by about 3%. D) fell by about 1%.
___ 2.If nominal GDP in 2014 is $20,000 billion while real GDPis $16,000 billion, then the GDP deflator in 2014 is:
___ 3.Measuring changes in a fixed basket of goods to assess changes in price is a ______ method.
Use the following to answer question 4:2012 2013 2014 Nominal GDP (billions of $) $2,291 $8,511 Real GDP (billions of $) $4,500 $5,865 GDP Deflator 86.1 112.7 ___ 4.(Table) According to the table, the GDP deflator for 2012 is approximately:
___ 5.Janet is receiving a 5% pay raise. If the rate of inflation is 2%, then Janet's purchasing power is:
A) falling. B) rising. C) unaffected by either inflation or the pay raise, because they are expressed in nominal and not in real terms. D) It is impossible to tell what is happening to Janet's purchasing power without further information. ___ 6.During periods of inflation, which of the following events does NOT occur?
Which group is helped by inflation?