ECN 211 Exam 2 2026 Questions and
Answers
Consider a small economy in which consumers buy only two goods: apples and
pears. In order to compute the consumer price index for this economy for two or
more consecutive years, we assume that
A) neither the number of apples nor the number of pears bought by the typical
consumer changes from year to year.
B) neither the price of apples nor the price of pears changes from year to year.
C) the number of apples bought by the typical consumer is equal to the number of
pears bought by the typical consumer in each year.
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,D) the percentage change in the price of apples is equal to the percentage change in
the price of pears from year to year. - Correct answer-Answer - neither the number
of apples nor the number of pears bought by the typical consumer changes from
year to year.
The consumer price index is used to
A) monitor changes in the level of real GDP over time.
B) monitor changes in the stock market.
C) monitor changes in the level of wholesale prices in the economy.
D) monitor changes in the cost of living over time. - Correct answer-Answer -
monitor changes in the cost of living over time.
Suppose that over the past year, the real interest rate was 6 percent and the inflation
rate was 4 percent. It follows that
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, A) the dollar value of savings increased at 10 percent, and the purchasing power of
savings increased at 2 percent.
B) the dollar value of savings increased at 6 percent, and the purchasing power of
savings increased at 2 percent.
C) the dollar value of savings increased at 10 percent, and the purchasing power of
savings increased at 6 percent.
D) the dollar value of savings increased at 6 percent, and the purchasing power of
savings increased at 10 percent. - Correct answer-Answer - the dollar value of
savings increased at 10 percent, and the purchasing power of savings increased at 6
percent.
If 2010 is the base year, then the inflation rate in 2015 equals - Correct answer-
Answer -
(CPI in 2015 - CPI in 2014/ CPI in 2014) x 100
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Answers
Consider a small economy in which consumers buy only two goods: apples and
pears. In order to compute the consumer price index for this economy for two or
more consecutive years, we assume that
A) neither the number of apples nor the number of pears bought by the typical
consumer changes from year to year.
B) neither the price of apples nor the price of pears changes from year to year.
C) the number of apples bought by the typical consumer is equal to the number of
pears bought by the typical consumer in each year.
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,D) the percentage change in the price of apples is equal to the percentage change in
the price of pears from year to year. - Correct answer-Answer - neither the number
of apples nor the number of pears bought by the typical consumer changes from
year to year.
The consumer price index is used to
A) monitor changes in the level of real GDP over time.
B) monitor changes in the stock market.
C) monitor changes in the level of wholesale prices in the economy.
D) monitor changes in the cost of living over time. - Correct answer-Answer -
monitor changes in the cost of living over time.
Suppose that over the past year, the real interest rate was 6 percent and the inflation
rate was 4 percent. It follows that
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, A) the dollar value of savings increased at 10 percent, and the purchasing power of
savings increased at 2 percent.
B) the dollar value of savings increased at 6 percent, and the purchasing power of
savings increased at 2 percent.
C) the dollar value of savings increased at 10 percent, and the purchasing power of
savings increased at 6 percent.
D) the dollar value of savings increased at 6 percent, and the purchasing power of
savings increased at 10 percent. - Correct answer-Answer - the dollar value of
savings increased at 10 percent, and the purchasing power of savings increased at 6
percent.
If 2010 is the base year, then the inflation rate in 2015 equals - Correct answer-
Answer -
(CPI in 2015 - CPI in 2014/ CPI in 2014) x 100
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