Q2_f07 - Temple University Economics 1101 Fall 2007 Quiz #2...

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Temple University Economics 1101 Fall 2007 Quiz #2 Name _______________________________ A. Multiple Choice (2 points each) Please circle the most appropriate response. 1. If 2005 is the base year and if there is 12% inflation between 2005 and 2006, then the CPI for 2005 is ___ and the CPI for 2006 is ____. a. 88; 100 b. 112; 100 c. 88; 112 d. 100; 112 2. One problem with our measure of the CPI is that a. It is automatically higher for larger countries b. It doesn’t fully account for substitution effects c. It fails to apply when there is deflation d. It fails to account for purchases of used goods 3. If you receive a 7 percent raise and there is 3 percent inflation, your real income: a. Rises by 4 percent b. Falls by 4 percent c. Rises by 10 percent d. Falls by 10 percent 4. Economists do not worry too much about frictional unemployment because a. It disappears as the economy pulls out of recession b. Few people are affected by it c. It does not typically last long d. It rises and falls over the course of the calendar year
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Q2_f07 - Temple University Economics 1101 Fall 2007 Quiz #2...

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