Econ 2030 Exam 2 Stern 2026 comprehensive
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Practice questions for this set
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5 factors of consumption
Choose an answer
current disposable income
household wealth
1 expected future income 2 Inflation rate
price level
real interest rate
3 Labor productivity 4 Substitution bias
Don't know?
Terms in this set (36)
, Inflation rate the percentage increase in the price level from
one year to the next and shows the change in the
cost of living
1. GDP deflator the 3 aggregate price levels used to calculate
2. CPI (Customer Price Index) inflation rate
3. PPI (Producer Price Index)
CPI an average of the goods and services purchased
by a typical urban family of four.
1. Substitution 4 biases that make the CPI overstate
2. Increase in quality
3. New product
4. Outlet
Substitution bias as some goods get more expensive, consumers
substitute them with cheaper goods
Increase in quality bias some increases in prices reflect an increase in
quality of goods and are not just pure inflation
New product bias some new goods (especially electronics) get
considerably cheaper immediately after they're
introduced to customers
Outlet bias internet shopping becomes increasingly popular
Nominal interest rate the interest rates that banks charge; the stated
interest rate on a loan
Real interest rate nominal interest rate - inflation rate
Long-run economic growth an upward trend of real GDP over time
questions and verified answers| get it 100%
ACCURATE!!
Save
Practice questions for this set
Learn 1 /7 Study with Learn
5 factors of consumption
Choose an answer
current disposable income
household wealth
1 expected future income 2 Inflation rate
price level
real interest rate
3 Labor productivity 4 Substitution bias
Don't know?
Terms in this set (36)
, Inflation rate the percentage increase in the price level from
one year to the next and shows the change in the
cost of living
1. GDP deflator the 3 aggregate price levels used to calculate
2. CPI (Customer Price Index) inflation rate
3. PPI (Producer Price Index)
CPI an average of the goods and services purchased
by a typical urban family of four.
1. Substitution 4 biases that make the CPI overstate
2. Increase in quality
3. New product
4. Outlet
Substitution bias as some goods get more expensive, consumers
substitute them with cheaper goods
Increase in quality bias some increases in prices reflect an increase in
quality of goods and are not just pure inflation
New product bias some new goods (especially electronics) get
considerably cheaper immediately after they're
introduced to customers
Outlet bias internet shopping becomes increasingly popular
Nominal interest rate the interest rates that banks charge; the stated
interest rate on a loan
Real interest rate nominal interest rate - inflation rate
Long-run economic growth an upward trend of real GDP over time
