Question

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. There was inflation from Year 3 to Year 4. B. Joanna spent $18 less in Year 1 than in Year 2. C. Joanna's purchases cost $30 more in Year 3 than in Year 2. D. Joanna's buying power increased between Year 1 and Year 4. 6. A person's real income will increase by 3% if her nominal income increases by A. 5% while the price index falls by 2%. B. 5% while the price index rises by 2%. C. 2% while the price index rises by 5%. D. 2% while the price index falls by 5%. 7. For a person to keep his real income steady at a certain level from one year to the next, his nominal income must A. rise if the price index falls. B. stay the same as the price index rises. C. fall if the price index rises. D. rise as fast as the price index. 8. A worker would be hurt least by inflation when the A. worker anticipates inflation and increases savings at the bank. B. worker is protected by a cost-of-living adjustment clause in an employment contract. C. worker is protected by fixed annual increases in wages and benefits in an employment contract. D. government increases the level of social security retirement benefits to correct for the effects of expected inflation. 9. The goal of expansionary fiscal policy is to increase A) the price level. B) aggregate supply. C) real GDP D) unemployment

Answer 1

5. A. There was inflation from year 3 to 4.

6.B.5% if index rises by 2%

7. D. Rise as fast as price index

8.B. Cost of living adjustment clause protects him

9.C.The real GDP