Homework Answers
Answer 7)
Option D is correct.
To keep the real Income Intact, It should atleast rise equal to the increase in the Price Index.
Answer 8 )
Option B is correct.
A worker would be hurt least if he is compensated for the infalted cost of living as he/she will be able to save the same as he/she used to save earlier.
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7 & 8
7. For a person to keep his real income steady at a certain...
choose the right one 5. Use the following information to answer the next question. Joanna purchases...
choose the right one
5. Use the following information to answer the next question. Joanna purchases only three products orange juice, prepared meals, and on-demand episodes of her favorite shows. Each week she purchases 2 bottles of orange juice, 14 prepared meals, and 8 on-demand episodes. The prices of bottles of orange juice, prepared meals, and on-demand episodes for four different years are shown in the table below. Based on this information, which of the following statements is true? A....
Question 8 For a given amount of nominal income, the real income will: Fall if the...
Question 8 For a given amount of nominal income, the real income will: Fall if the price level falls Be unaffected if the price level falls O Fall if the price level rises O Rise as the price level rises
QUESTION 7 Indexing is the process of: increasing a real quantity by an amount equal to...
QUESTION 7 Indexing is the process of: increasing a real quantity by an amount equal to the percentage change in a price index. dividing a real quantity by a price index. dividing a nominal quantity by a price index. increasing a nominal quantity by an amount equal to the percentage change in a price index. QUESTION 8 Inflation makes it difficult to distinguish relative price changes from changes in the general level of prices. Consequently, inflation the efficiency of the...
39. The most important use of GDP is as a measure of the size of the...
39. The most important use of GDP is as a measure of the size of the economy which can be used to compare A) True B) False 40. When an economy is in an expansion, A) tends to fall, and overall prices tend to rise. B) and overall prices tend to fall. C) tends to rise, and overall prices tend to fall. D) and overall prices tend to rise 41 You have gone to the bank to borrow money for...
O Cucome my price cente proportionat cater than the inten nominal income Yes, because real income...
O Cucome my price cente proportionat cater than the inten nominal income Yes, because real income may fall if price increases are proportionally less than the increases in nominal income 4 Question 30 (1 point) A lender need not be penalized by inflation if the: 3: 6 lender correctly anticipates inflation and increases the nominal interest rate accordingly ulong-term rate of inflation is less than the short-term rate of inflation 4: inflation is unanticipated by both borrower and lender 8...
1. The best definition of inflation is a(n): a temporary increase in prices. b. increase in...
1. The best definition of inflation is a(n): a temporary increase in prices. b. increase in the price of one important commodity such as food. c. persistent increase in the general level of prices as measured by a price index. d. increase in the purchasing power of the dollar. 2. Inflation: a. reduces the cost-of-living of the typical worker. b. is measured by changes in the cost of a typical market basket of goods between time periods. c. causes the...
17. When the inflation rate rises, the purchasing power of nominal income: a remains unchanged. c....
17. When the inflation rate rises, the purchasing power of nominal income: a remains unchanged. c. increases b. decreases d. changes by the inflation rate minus one. 18. Inflation is defined as an increase in: a real wages of workers. b. real GDP c. the average price level. d. all consumer products. 19. Those hurt by inflation include: a. labor unions with COLA clauses. b. borrowers. savers d. owners of real estate. e owners of precious metals, antiques, and works...
Which of the three measures of inflation measures the average price level of the largest number 19. of goods? a. The CP b. The GDP Deflator c. The Producer Price Index d. The Wholesale Price Inde...
Which of the three measures of inflation measures the average price level of the largest number 19. of goods? a. The CP b. The GDP Deflator c. The Producer Price Index d. The Wholesale Price Index 20. Which of the following is NOT a reason why people save a. To smooth consumption over their lives b. To finance their future retirement c. As a way to transfer income from good times to bad d. To increase investment 21. If the...
1. TRUE/FALSE( 1 mark per question, 20 marks in total) [1) An economy's income is the...
1. TRUE/FALSE( 1 mark per question, 20 marks in total) [1) An economy's income is the same as its expenditure because every transaction has a buyer and a seller. 2) GDP is the market value of all final goods and services produced by a country's citizens in a given period of time. [3) If nominal GDP is $10,000 and real GDP is $8,000, then the GDP deflator is 125. 14) Other things equal, in countries with higher levels of real...
Complete the questions below that are based on your chapter readings. Submit your answers in a...
Complete the questions below that are based on your chapter readings. Submit your answers in a Microsoft Word document (no PDFs) by 11:00 p.m. on Sunday of Unit 2 or as directed by your professor. 1. Suppose you are given the following data for a small economy: Number of unemployed workers: 1,000,000. Labor force: 10,000,000. Based on this data, answer the following: What is the unemployment rate? Can you determine whether the economy is operating at its full employment level?...
choose the right one
5. Use the following information to answer the next question. Joanna purchases only three products orange juice, prepared meals, and on-demand episodes of her favorite shows. Each week she purchases 2 bottles of orange juice, 14 prepared meals, and 8 on-demand episodes. The prices of bottles of orange juice, prepared meals, and on-demand episodes for four different years are shown in the table below. Based on this information, which of the following statements is true? A....
Question 8 For a given amount of nominal income, the real income will: Fall if the price level falls Be unaffected if the price level falls O Fall if the price level rises O Rise as the price level rises
QUESTION 7 Indexing is the process of: increasing a real quantity by an amount equal to the percentage change in a price index. dividing a real quantity by a price index. dividing a nominal quantity by a price index. increasing a nominal quantity by an amount equal to the percentage change in a price index. QUESTION 8 Inflation makes it difficult to distinguish relative price changes from changes in the general level of prices. Consequently, inflation the efficiency of the...
39. The most important use of GDP is as a measure of the size of the economy which can be used to compare A) True B) False 40. When an economy is in an expansion, A) tends to fall, and overall prices tend to rise. B) and overall prices tend to fall. C) tends to rise, and overall prices tend to fall. D) and overall prices tend to rise 41 You have gone to the bank to borrow money for...
O Cucome my price cente proportionat cater than the inten nominal income Yes, because real income may fall if price increases are proportionally less than the increases in nominal income 4 Question 30 (1 point) A lender need not be penalized by inflation if the: 3: 6 lender correctly anticipates inflation and increases the nominal interest rate accordingly ulong-term rate of inflation is less than the short-term rate of inflation 4: inflation is unanticipated by both borrower and lender 8...
1. The best definition of inflation is a(n): a temporary increase in prices. b. increase in the price of one important commodity such as food. c. persistent increase in the general level of prices as measured by a price index. d. increase in the purchasing power of the dollar. 2. Inflation: a. reduces the cost-of-living of the typical worker. b. is measured by changes in the cost of a typical market basket of goods between time periods. c. causes the...
17. When the inflation rate rises, the purchasing power of nominal income: a remains unchanged. c. increases b. decreases d. changes by the inflation rate minus one. 18. Inflation is defined as an increase in: a real wages of workers. b. real GDP c. the average price level. d. all consumer products. 19. Those hurt by inflation include: a. labor unions with COLA clauses. b. borrowers. savers d. owners of real estate. e owners of precious metals, antiques, and works...
Which of the three measures of inflation measures the average price level of the largest number 19. of goods? a. The CP b. The GDP Deflator c. The Producer Price Index d. The Wholesale Price Index 20. Which of the following is NOT a reason why people save a. To smooth consumption over their lives b. To finance their future retirement c. As a way to transfer income from good times to bad d. To increase investment 21. If the...
1. TRUE/FALSE( 1 mark per question, 20 marks in total) [1) An economy's income is the same as its expenditure because every transaction has a buyer and a seller. 2) GDP is the market value of all final goods and services produced by a country's citizens in a given period of time. [3) If nominal GDP is $10,000 and real GDP is $8,000, then the GDP deflator is 125. 14) Other things equal, in countries with higher levels of real...
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