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Unformatted text preview: 1 ECON 222: Study Guide: CPI, Inflation, Unemployment Dr. C. Battista CPI and INFLATION 4. Answer the next four questions based on the following data using year 1 as the base year. All dollars are in billions. Calculate to one decimal place. Year CPI 1 160 2 165 3 170 4 177 (a) What was the percentage rise in prices between years 1 and 2? __________ (b) What was the percentage rise in prices between years 2 and 3? __________ (c) What was the percentage rise in prices between years 3 and 4? __________ 7. If the Consumer Price Index was 166.6 in one year and 172.2 in the next year, then the rate of inflation from one year to the next was: A. 3.4% B. 4.1% C. 5.4% D. 6.0% 8. The Consumer Price Index was 115 one year and 120 the next year. The rate of inflation from one year to the next was approximately: A. 2.2 percent B. 2.9 percent C. 3.4 percent D. 4.3 percent 9. Inflation caused by an increase in aggregate spending is referred to as: A. Cost-push inflation B. Demand-push inflation C. Demand-pull inflation D. Hyperinflation 12. Inflation caused by a rise in per unit production costs is referred to as: A. Cost-push inflation B. Demand-pull inflation C. Unanticipated inflation D. Hyperinflation 2 The Business Cycle 14. Refer to the above diagram. The phases of the business cycle from points A to D are, respectively:...
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