Lecture 1_Quiz 2.pdf - Econ1015 Lecture 1 Spring 2013 Name Quiz 2 Version 2 Dr Myoung Lee University of Missouri Thursday Student ID TA This Quiz will

Lecture 1_Quiz 2.pdf - Econ1015 Lecture 1 Spring 2013 Name...

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Econ1015: Lecture 1 Quiz 2 Version 2 Dr. Myoung Lee Spring 2013 Thursday (3/21/13) University of Missouri Name: Student ID TA: . This Quiz will be graded based ONLY on what you write in the space provided. Please show your work (step by step) for every question in order to get full credit. GOOD LUCK! 1. (2pt) Suppose that the CPI was 115 in year 1987, and the CPI is 230 in year 2012. Charlie ’s dad started his private clinic in 1987 and earned a yearly income of 100,000. Charlie is a movie star, and in 2012 he earned $209,000. Is Charlie ’s job paying better than his dad ’s ? Explain. Yes, since 100,000× =200,000<209,000. 2. (1pt) The expected inflation rate was 3%. Joel borrowed $10,000 from Will for a year and repaid Will $10,400 at the end of the year. Will would be unhappy at the end of year if the actual inflation rate turn out to be: (1) 5% (2) 4% (3) 3% (4) 2% (5) Both (1) and (2) 3. (1pt) Which of the following would be example(s) of the Shoe leather cost of inflation? (1) Looking at several web sites to check prices (2) Changing price tags (3) Re-printing menus (4) The wear and tear on your car from additional trips to the bank (5) The Crony Capitalism 4. (1pt) Lockheed Martin produces fighter jets in the United States, with some of those warplanes being exported to other nations and some of them being sold within the United States. Suppose prices of those warplanes significantly rise : (1) The GDP deflator and the CPI will both increase. (2) The GDP deflator will decrease and the CPI will be unchanged.
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  • Spring '08
  • MyoungLee

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