Question

A) Structurally unemployed. B) Cyclically unemployed. CV Frictionally unemployed D Seasonally unemployed. 15. Inflation is: A) A rise in the price of every good and service. B) An increase in relative prices of all goods and services. A situation in which purchasing power increases (D) An increase in the average level of prices of goods and services. 16. Real income is: A) Nominal income adjusted for inflation B) The amount of money income received in a given time period, measured in Current dollars C) The use of nominal dollars to gauge changes in income D) The basis for indexing of price changes. 17. To construct the Consumer Price Index, the Bureau of Labor Statistics must: A) Find out what people buy with their incomes and how the prices of what they buy change B) Find out why people buy what they do and how the prices of what they buy change c) Find out what is in the typical consumer market basket on the basis of what producers produce D) Conduct consumer expenditure surveys to determine how much prices rise. 18. If the price of computers falls 6 percent during a period when the level of average prices falls 12 percent, the relative price of computers compared with other goods: Stays the same. Increases Decreases More information is required to answer this question 19. Ir the number of dollars you receive every year in income is the same, but prices are rising, then your nominal income A) Rises and your real income rises B) Rises but your real income falls. C) Falls but your real income rises D) Stays the same but your real income falls.

Answer 1

Answer 15. Correct answer, option D.

Inflation is the increase in average price level of goods and services.

Inflation is measured using the basket of goods and services, and thus may not count for every good and services.

Given the income, a rise in average prices will reduce the purchasing power of people.

Note: As per HOMEWORKLIB RULES, first question is answered.