Econ 2101 Test rev ch.12-15
(questions and answers)
Hyperinflation - answer Extremely high rates of inflation
Which of the following shows the medium of exchange function of money -
answer Daniela goes to the store and purchases roses with U.S. dollars.
Menu cost are the - answer Marginal costs of adjusting prices
If you see that the consumer price index this year is lower than the consumer
price index last year this means that: - answer On average, prices went down
Which of the following lists the functions of money - answer Medium of
exchange, store of value, and unit of account
If you see that the inflation between last year and this year is 3% this means
that - answer on average, prices went up across the economy by 3%.
The real interest rate is the - answer the nominal interest rate minus the rate
of inflation
The GDP deflator is an index tracks - answer The price of all goods and
services produced domestically
Which of the following correctly shows the steps needed to calculate the
inflation rate - answer Find out what people typically buy, collect the prices
from the stores where people usually shop, tally up the cost of the basket of
goods and services, calculate the inflation rate
, The rational rule of consumption is to consume more today if the: - answer
marginal benefit of a dollar of consumption today is greater than (or equal
to) the marginal benefit of spending a dollar plus interest in the future.
If there is _____ rise in income, there will be an intermediate increase in total
consumption in the economy. - answer a temporary
If there is a temporary rise in income, a consumption smoother will exhibit
_____ in consumption, and a hand-to-mouth consumer will exhibit _____ in
consumption. - answer a small increase; a large increase
Why does an anticipated change in income lead to no change in
consumption for a consumption smoother? - answer Consumption is based
on permanent income, which is already factored into anticipated future
changes in income
Credit constraints limit the: - answer amount of money that people can
borrow.
:If there is a temporary rise in income, a consumption smoother will exhibit
_____ in consumption, and a hand-to-mouth consumer will exhibit _____ in
consumption. - answer a small increase; a large increase
The news of an impending recession in the economy will lead to a:
(i) fall in consumption.
(ii) rise in precautionary saving.
(iii) rise in national saving.
(iv) rise in consumption. - answer (i), (ii), and (iii)
The rational rule of consumption is to consume more today if the: - answer
marginal benefit of a dollar of consumption today is greater than (or equal
to) the marginal benefit of spending a dollar plus interest in the future.
(questions and answers)
Hyperinflation - answer Extremely high rates of inflation
Which of the following shows the medium of exchange function of money -
answer Daniela goes to the store and purchases roses with U.S. dollars.
Menu cost are the - answer Marginal costs of adjusting prices
If you see that the consumer price index this year is lower than the consumer
price index last year this means that: - answer On average, prices went down
Which of the following lists the functions of money - answer Medium of
exchange, store of value, and unit of account
If you see that the inflation between last year and this year is 3% this means
that - answer on average, prices went up across the economy by 3%.
The real interest rate is the - answer the nominal interest rate minus the rate
of inflation
The GDP deflator is an index tracks - answer The price of all goods and
services produced domestically
Which of the following correctly shows the steps needed to calculate the
inflation rate - answer Find out what people typically buy, collect the prices
from the stores where people usually shop, tally up the cost of the basket of
goods and services, calculate the inflation rate
, The rational rule of consumption is to consume more today if the: - answer
marginal benefit of a dollar of consumption today is greater than (or equal
to) the marginal benefit of spending a dollar plus interest in the future.
If there is _____ rise in income, there will be an intermediate increase in total
consumption in the economy. - answer a temporary
If there is a temporary rise in income, a consumption smoother will exhibit
_____ in consumption, and a hand-to-mouth consumer will exhibit _____ in
consumption. - answer a small increase; a large increase
Why does an anticipated change in income lead to no change in
consumption for a consumption smoother? - answer Consumption is based
on permanent income, which is already factored into anticipated future
changes in income
Credit constraints limit the: - answer amount of money that people can
borrow.
:If there is a temporary rise in income, a consumption smoother will exhibit
_____ in consumption, and a hand-to-mouth consumer will exhibit _____ in
consumption. - answer a small increase; a large increase
The news of an impending recession in the economy will lead to a:
(i) fall in consumption.
(ii) rise in precautionary saving.
(iii) rise in national saving.
(iv) rise in consumption. - answer (i), (ii), and (iii)
The rational rule of consumption is to consume more today if the: - answer
marginal benefit of a dollar of consumption today is greater than (or equal
to) the marginal benefit of spending a dollar plus interest in the future.
