ECON 100 QUIZ #7 QUESTIONS AND
CORRECT ANSWERS
The inflation rate is the
A.
difference in the price level from one year to the next multiplied by 100.
B.
percentage change in the CPI from one year to the next year.
C.
difference between the current period CPI and the base period CPI.
D.
percentage change in the composition of the CPI market basket from the base year to the next year.
E.
difference between the base period CPI and the current period CPI. ✅✅CORRECT ANSW-B.
percentage change in the CPI from one year to the next year.
The CPI is biased because it
A.
accurately measures the cost of living but not the cost of producing.
B.
takes into account the changes in technology.
C.
does not always take into account the changes in product quality.
D.
does not include services.
E.
takes into account the changes in product quality. ✅✅CORRECT ANSW-C.
does not always take into account the changes in product quality.
If prices have increased since the base period, then
, A.
real GDP is larger than nominal GDP.
B.
there is no way to adjust nominal GDP so that it equals real GDP.
C.
real GDP is smaller than nominal GDP.
D.
real GDP is equal to nominal GDP.
E.
real GDP can no longer be compared to nominal GDP. ✅✅CORRECT ANSW-C.
real GDP is smaller than nominal GDP.
If for a given year nominal GDP is $2000 billion and real GDP is $1500 billion, then the GDP price
index is
A.
0.75
B.
750.
C.
1.33
D.
100.
E.
133 ✅✅CORRECT ANSW-E.
133
Which of the following formulas would you use to calculate the nominal wage rate?
A.
nominal wage rate = real wage rate times CPI
B.
nominal wage rate = (real wage rate times CPI) times 100
CORRECT ANSWERS
The inflation rate is the
A.
difference in the price level from one year to the next multiplied by 100.
B.
percentage change in the CPI from one year to the next year.
C.
difference between the current period CPI and the base period CPI.
D.
percentage change in the composition of the CPI market basket from the base year to the next year.
E.
difference between the base period CPI and the current period CPI. ✅✅CORRECT ANSW-B.
percentage change in the CPI from one year to the next year.
The CPI is biased because it
A.
accurately measures the cost of living but not the cost of producing.
B.
takes into account the changes in technology.
C.
does not always take into account the changes in product quality.
D.
does not include services.
E.
takes into account the changes in product quality. ✅✅CORRECT ANSW-C.
does not always take into account the changes in product quality.
If prices have increased since the base period, then
, A.
real GDP is larger than nominal GDP.
B.
there is no way to adjust nominal GDP so that it equals real GDP.
C.
real GDP is smaller than nominal GDP.
D.
real GDP is equal to nominal GDP.
E.
real GDP can no longer be compared to nominal GDP. ✅✅CORRECT ANSW-C.
real GDP is smaller than nominal GDP.
If for a given year nominal GDP is $2000 billion and real GDP is $1500 billion, then the GDP price
index is
A.
0.75
B.
750.
C.
1.33
D.
100.
E.
133 ✅✅CORRECT ANSW-E.
133
Which of the following formulas would you use to calculate the nominal wage rate?
A.
nominal wage rate = real wage rate times CPI
B.
nominal wage rate = (real wage rate times CPI) times 100
