Question 1

A measure of the average price level for GDP is called the:

Accepted Answer

A)  aggregate price level.
B)  national price level.
C)  economy price level.
D)  total price level.E) C) and D)
F) A) and D)

Question 2

According to the quantity theory of money,increasing the money supply:

Accepted Answer

A)  leads to inflation.
B)  causes production to increase.
C)  leads to increased spending.
D)  causes each dollar to be spent less often.E) B) and C)
F) A) and D)

Question 3

The nominal interest rate is:

Accepted Answer

A)  the everyday notion of the interest rate.
B)  the reported interest rate,not adjusted for the effects of inflation.
C)  the amount of interest the bank pays you for saving or charges you for borrowing.
D)  All of these statements are true.E) A) and B)
F) None of the above

Question 4

Kim is paid $50,000 per year,and pays an annual income tax of 10 percent.Due to an inflation rate of 10 percent,her pay increases to $55,000,which puts her in a higher tax bracket where she must pay 20 percent.Kim has experienced:

Accepted Answer

A)  bracket creep.
B)  the inflationary cost of tax distortion.
C)  a decrease in her purchasing power.
D)  All of these statements are true.E) C) and D)
F) B) and D)

Question 5

Central banks,as they conduct monetary policy,inevitably affect only ___________,with no lasting impact on ___________ in the long run.

Accepted Answer

A)  prices;employment
B)  employment;prices
C)  output;prices
D)  demand;employmentE) A) and C)
F) A) and B)

Question 6

The natural rate of unemployment:

Accepted Answer

A)  occurs at the economy's potential level of output.
B)  is zero.
C)  will cause a steady rise in the price level.
D)  All of these statements are true.E) C) and D)
F) A) and C)

Question 7

Arguably the most damaging economic consequence of inflation is:

Accepted Answer

A)  high prices.
B)  the uncertainty it can create.
C)  the adjustment of sticky wages.
D)  None of these statements is true.E) B) and D)
F) All of the above

Question 8

To measure core inflation,the BLS excludes ______________ from the basket of goods used to calculate the CPI.

Accepted Answer

A)  food and gasoline
B)  food,clothing,and housing
C)  food and housing
D)  housing and gasolineE) A) and D)
F) B) and C)

Question 9

Deflation is:

Accepted Answer

A)  a sustained fall in the aggregate price level.
B)  a sustained increase in the aggregate price level.
C)  a steady,unchanging aggregate price level.
D)  a sustained fall in the exchange rate.E) A) and B)
F) A) and D)

Question 10

A sustained fall in the aggregate price level is called:

Accepted Answer

A)  deflation.
B)  inflation.
C)  economic growth.
D)  economic decline.E) A) and C)
F) All of the above

Exam 32: Inflation

According to the quantity theory of money,increasing the money supply:

Correct Answer
verified

Kim is paid $50,000 per year,and pays an annual income tax of 10 percent.Due to an inflation rate of 10 percent,her pay increases to $55,000,which puts her in a higher tax bracket where she must pay 20 percent.Kim has experienced:

Correct Answer
verified

A sustained fall in the aggregate price level is called:

Correct Answer
verified

Deflation is:

Correct Answer
verified

The natural rate of unemployment:

Correct Answer
verified

To measure core inflation,the BLS excludes ______________ from the basket of goods used to calculate the CPI.

Correct Answer
verified

Arguably the most damaging economic consequence of inflation is:

Correct Answer
verified

A measure of the average price level for GDP is called the:

Correct Answer
verified

Central banks,as they conduct monetary policy,inevitably affect only _,with no lasting impact on _ in the long run.

Correct Answer
verified

The nominal interest rate is:

Correct Answer
verified

Exam 32: Inflation

According to the quantity theory of money,increasing the money supply:

Correct AnswerverifiedShow Answer

Kim is paid $50,000 per year,and pays an annual income tax of 10 percent.Due to an inflation rate of 10 percent,her pay increases to $55,000,which puts her in a higher tax bracket where she must pay 20 percent.Kim has experienced:

Correct AnswerverifiedShow Answer

A sustained fall in the aggregate price level is called:

Correct AnswerverifiedShow Answer

Deflation is:

Correct AnswerverifiedShow Answer

The natural rate of unemployment:

Correct AnswerverifiedShow Answer

To measure core inflation,the BLS excludes ______________ from the basket of goods used to calculate the CPI.

Correct AnswerverifiedShow Answer

Arguably the most damaging economic consequence of inflation is:

Correct AnswerverifiedShow Answer

A measure of the average price level for GDP is called the:

Correct AnswerverifiedShow Answer

Central banks,as they conduct monetary policy,inevitably affect only ___________,with no lasting impact on ___________ in the long run.

Correct AnswerverifiedShow Answer

The nominal interest rate is:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Central banks,as they conduct monetary policy,inevitably affect only _,with no lasting impact on _ in the long run.

Correct Answer
verified

Correct Answer
verified