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Economics
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13 Dec 2019

QUESTION 48

Which of the following is most liquid?

a corporate bond

a mutual fund share

a government bond

a dollar bill

2 points

QUESTION 49

Which of the following is not directly counted in GDP?

intermediate goods

government purchases

investment expenditures

consumer goods

2 points

QUESTION 50

Which of the following price indices comes closest to measuring the cost of living of the typical household?

household price index

producer price index

consumer price index

GDP deflator

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Beverley Smith
Beverley SmithLv2
17 Dec 2019
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Related textbook solutions

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Related questions

1. For the economy as a whole Income must be more than expenditures.

Select one:

a. False

b. True

 

2. When measuring the Consumer Price Index (CPI), the major problems faced are:

Select one:

a. Substitution bias

b. Introduction of new goods

c. Unmeasured quality change.

d. All the above

 

3. Household spending on education is included in the consumption of services.

Select one:

a. True

b. False

 

4. Which of the following items is not part of the GDP calculation?

Select one:

a. The government expands the highway between two main cities.  

b. A person purchases a local car

c. A number of unemployed citizens receive unemployment insurance benefits.  

d. Local citizens receiving medical care

1. The peak of the business cycle

a. usually occurs when the natural rate of unemployment is equal to its actual rate.

b. is the point where an expansion ends and a recession begins

c. is the minimum level of nominal GDP.

2. The consumer price index (CPI) reflects

a. the median annual expenditures of a typical single family of four on consumer goods

b. the average price of all goods and services computed from the ratio of nominal GDP to real GDP.

c. the changes in the prices of goods and services typically purchased by consumers.

3. The Consumer Price Index is NOT used

a. to measure the average price level of all final goods and services produced

b. to compute the U.S. inflation rate.

c. to measure changes in the cost of living

4. Which of the following is true of a price index that uses a fixed market basket?

a. It excludes new goods and services

b. It accurately predicts the impact of rising prices when purchases are made at superstores.

c. It overstates the importance of items that fall in price.

5. A quality-change bias in the construction of the CPI arises because

a. big box stores that carry electronic goods routinely run sales to reduce their inventories before stocking new models.

b. consumers also shop at superstores or outlet stores

c. newer versions of a product might be more expensive but could also be better than the older version.

Question 2

  1. For any given expected inflation rate, short-run aggregate supply curves show the relationship between

    the money supply and growth rate of output.

    inflation and growth rate of output.

    production factors and wages.

    inflation and wages.

1 points

Question 3

  1. Why is the SRAS curve steeper above its intersection with the Solow growth curve?

    Wages are stickier in the upward direction.

    Wages are less sticky in the upward direction.

    Lower inflation will lead to faster growth.

    Employees become less motivated to work during times of unexpected inflation.

1 points

Question 4

  1. What factors triggered the Great Depression?

    decreased consumer spending and tight monetary policy

    decreased investment and increased inflation

    decreased employment and increased money supply

    decreased inflation and increased income taxes

1 points

Question 5

  1. How might changes in the money supply be non-neutral in the short run?

    As the amount of money circulating in the economy changes before prices respond, consumers' purchases change accordingly, which leads producers to change production levels.

    When money supply changes in the short run, it will affect nominal, but not real, variables in the short run.

    As money growth increases at a faster rate, it will cause real GDP to grow at an equally faster rate.

    If producers expect inflation to increase, they will increase supply in order to sell before the arrival of inflation.

1 points

Question 6

  1. For a given nominal interest rate, an increase in deflation will cause the real rate of interest to

    remain relatively constant.

    increase.

    decrease.

    become unpredictable.

    Question 8

    Which of the three price indexes measures the average price level of the largest total number of goods?

    the consumer price index

    the GDP deflator

    the producer price index

    Each price index accomplishes the same task.

    The textbook uses the

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