EC201 chapter_7_Quiz Full

A producerprice index b gdpdeflator c wholesaleprice

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Unformatted text preview: nswer: C Diff: 2 Topic: Inflation Skill: Analytic AACSB: Analytic Skills 35) The CPI in period 1 is 300 and the CPI in period 2 is 150. The rate of inflation between period 1 and period 2 is A) -50%. B) -100%. C) 33.33%. D) -60%. Answer: A Diff: 2 Topic: Inflation Skill: Analytic AACSB: Analytic Skills 36) Which of the following statements is FALSE? A) One problem bundle index as a measure of the cost of living is that it does not account for substitutions that with any fixed- consumers might make in response to price changes. B) The producer price index is considered to be a leading indicator of future inflation rates. C) The best overall indicator of inflationary pressures in the economy is the GDP deflator. D) The consumer price index somewhat understates changes in the cost of living. Answer: D Diff: 3 Topic: Inflation Skill: Fact 37) A price index that tends to be a leading indicator of future inflation rates is the A) consumer price index. B) producer price index. C) GDP price index. D) retail price index. Answer: B Diff: 3 Topic: Inflation Skill: Fact 38) The broadest-based price index available is the A) GDP deflator. B) producer price index. C) consumer price index. D) wholesale price index. Answer: A Diff: 2 Topic: Inflation Skill: Fact 39) Most economists consider the ________ as...
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