EC201 chapter_7_Quiz Full

Ispaidaninterestrateof4onhissavingsbuttheinflationrate

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Unformatted text preview: the best overall indicator of inflationary pressures in the economy. A) producer price index B) GDP deflator C) wholesale price index D) consumer price index Answer: B Diff: 1 Topic: Inflation Skill: Fact 40) Which of the following statements is FALSE? A) An individual living on a fixed income is always made worse off as a result of inflation. B) Those individuals receiving welfare benefits have been harmed by inflation because increases in welfare payments have not kept pace with inflation. C) Inflation will have no effect on an individual whose income is indexed to the inflation rate. D) Some people in society benefit from inflation. Answer: C Diff: 2 Topic: Inflation Skill: Analytic AACSB: Analytic Skills 41) The difference between the interest rate on a loan and the inflation rate is the A) nominal interest rate. B) inflation premium. C) real interest rate. D) expected interest rate. Answer: C Diff: 2 Topic: Inflation Skill: Definition 42) Which of the following increases the real interest rate? A) a decre...
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