Question

3] The inflation rate you are likely to hear on the nightly news is calculated from a. the GDP deflator. b. the CPI. c. the Dow Jones Industrial Average. d. the unemployment rate. [4] Gross domestic product measures two things at once a. the total spending of everyone in the economy and the total saving of b. the total income of everyone in the economy and the total expenditure everyone in the economy on the economy's output of goods and services. the value of the economy's output of goods and services for domestic citizens and the value of the economy's output of goods and services for the rest of the world. d. the total income of households in the economy and the total profit of firms in the economy. [S] If an economy's GDP rises, then it must be the case that the ecomomy's a. income rises and saving falls. b. income and saving both rise. c. income and expenditure both rise. d. income rises and expenditure falls [6] In calculating the CPI, a fixed basket of goods and services is used. The quantities of the goods and services in the fixed basket are determined by a. surveying consumers. b. surveying sellers of the goods and services. c. working backward from the rate of inflation to arrive at imputed values for those quantities d. ar bitrary choices made by federal government employees. e quantity of goods and services produced from each unit of labor inpu called a. standard of living. b. productivity c. capitalized quantity d. the knowledge base. nowledge and skills that workers acquire through education,trai ures that is used to produce g00 [8] Human capital is the

Answer 1

3. B.

Explanation: CPI is the change in the price level of the basket of goods most commonly purchased by consumers.

4. B

Explanation: GDP measures the total income as well as total spending on goods and services produced in an economy.

5. C

Explanation: GDP measures the total income as well as total spending on goods and services produced in an economy.

6. A

Explanation: CPI is consumer price index. It compares the price level of a basket of goods commonly consumed by consumers. The goods and their quantity in the index are determined after consumer surveys.

7. B

Explanation: Productivity refers to output for each unit of input.