Economics

41 Questions  I  By Rinscoe
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1.   GDP is calculated including
A.
B.
C.
D.
2.  Net exports are defined as:
A.
B.
C.
D.
3.  . If the United States imported $1.5 billion worth of goods and services and sold $2.9 billion worth of goods and services outside its borders, net exports would equal
A.
B.
C.
D.
E.
4.  Which of the following is included in government purchases?
A.
B.
C.
D.
E.
5.   The consumer price index is used to:
A.
B.
C.
D.
6.  6. The CPI in year 1 (the base year) equals 100 and in year 2 equals 106. It can be concluded that:   
A.
B.
C.
D.
E.
7.  7. If the CPI increases from one year to the next, it can be concluded that the economy has experienced:   
A.
B.
C.
D.
E.
8.  8. If the CPI decreases from one year to the next, it can be concluded that the economy has experienced:
A.
B.
C.
D.
E.
9.  The current cost of a market basket of goods is $6,000. The cost of the same basket of goods in the base year was $4,000. The current price index is:     CPI=  Cost in current year/ cost in base year X 100        d)    133.      e)    66.7.
A.
B.
C.
D.
E.
10.   If nominal GDP is $8 trillion and real GDP is $10 trillion, then the GDP deflator is
A.
B.
C.
D.
11.  Refer to Table 10-4.  In 2008, this country’s
A.
B.
C.
D.
12.  Refer to Table 10-4.  In 2009, this country’s
A.
B.
C.
D.
13.  13. Refer to Table 10-4.  In 2010, this country’s
A.
B.
C.
D.
14.  Refer to Table 10-4.  In 2011, this country’s
A.
B.
C.
D.
15.    15. Refer to Table 10-4.  This country’s output grew 
A.
B.
C.
D.
16.  16. Refer to Table 10-4.  This country’s inflation rate from 2009 to 2010 was    
A.
B.
C.
D.
17.  17. Refer to Table 10-4.  This country’s inflation rate from 2010 to 2011 was
A.
B.
C.
D.
18.  18.   When the consumer price index rises, the typical family
A.
B.
C.
D.
19.  19. The CPI is more commonly used as a gauge of inflation than the GDP deflator is because
A.
B.
C.
D.
20.  Suppose a basket of goods and services has been selected to calculate the CPI and 2002 has been selected as the base year.  In 2002, the basket’s cost was $50; in 2004, the basket’s cost was $52; and in 2006, the basket’s cost was $57.25.  The value of the CPI in 2006 was Cost of basket current year/ Cost of basket previous year  X 100
A.
B.
C.
D.
21.  22.   The price index was 220 in one year and 260 in the next year.  What was the inflation rate?
A.
B.
C.
D.
22.  For an imaginary economy, the value of the consumer price index was 140 in 2006 and 149.10 in 2007. The economy’s inflation rate for 2007 was
A.
B.
C.
D.
23.  Between October 2001 and October 2002, the CPI in Canada rose from 116.5 to 119.8 and the CPI in Mexico rose from 93.2 to 102.3.  What were the inflation rates for Canada and Mexico over this one-year period?    
A.
B.
C.
D.
24.  The price index was 128.96 in 2006, and the inflation rate was 24 percent between 2005 and 2006.  The price index in 2005 was
A.
B.
C.
D.
25.  The table below pertains to Iowan, an economy in which the typical consumer’s basket consists of 3 pounds of pork and 4 bushels of corn. Year Price of Pork Price of Corn 2008 $20 per pound $12 per bushel 2009 $25 per pound $18 per bushel   Refer to Table 11-2.  The cost of the basket in 2008 was
A.
B.
C.
D.
26.  Year Price of Pork Price of Corn 2008 $20 per pound $12 per bushel 2009 $25 per pound $18 per bushel Refer to Table 11-2.  The cost of the basket in 2009 was  
A.
B.
C.
D.
27.  28. Refer to Table 11-2.  If 2008 is the base year, then the CPI for 2008 was Year Price of Pork Price of Corn 2008 $20 per pound $12 per bushel 2009 $25 per pound $18 per bushel  
A.
B.
C.
D.
28.  . Refer to Table 11-2.  If 2008 is the base year, then the CPI for 2009 was Year Price of Pork Price of Corn 2008 $20 per pound $12 per bushel 2009 $25 per pound $18 per bushel  
A.
B.
C.
D.
29.  Refer to Table 11-2.  If 2009 is the base year, then the CPI for 2008 was
A.
B.
C.
D.
30.  . Refer to Table 11-2.  If 2009 is the base year, then the CPI for 2009 was
A.
B.
C.
D.
31.  Refer to Table 11-2.  If 2008 is the base year, then the inflation rate in 2009 was
A.
B.
C.
D.
32.  . Refer to Table 11-2.  If 2009 is the base year, then the inflation rate in 2009 was
A.
B.
C.
D.
33.  Which of the following is not a widely acknowledged problem with using the CPI as a measure of the cost of living?
A.
B.
C.
D.
34.  The CPI and the GDP deflator
A.
B.
C.
D.
35.  . In 1931, President Herbert Hoover was paid a salary of $75,000.  Government statistics show a consumer price index of 15.2 for 1931 and 214.5 for 2009.  President Hoover’s 1931 salary was equivalent to a 2009 salary of about
A.
B.
C.
D.
36.  You know that a candy bar cost five cents in 1962.  You also know the CPI for 1962 and the CPI for today.  Which of the following would you use to compute the price of the candy bar in today's prices?
A.
B.
C.
D.
37.  . The CPI was 172 in 2007, and the CPI was 46.5 in 1982.  If your parents put aside $1,000 for you in 1982, then how much would you have needed in 2007 in order to buy what you could have bought with the $1,000 in 1982?
A.
B.
C.
D.
38.   Social Security payments are indexed for inflation using
A.
B.
C.
D.
39.  40. If the nominal interest rate is 8 percent and the rate of inflation is 3 percent, then the real interest rate is . d.  
A.
B.
C.
D.
40.  The consumer price index was 225 in 2006 and 234 in 2007.  The nominal interest rate during this period was 6.5 percent.  What was the real interest rate during this period?
A.
B.
C.
D.
41.  The CPI was 120 in 2008 and 126 in 2009.  Phil borrowed money in 2008 and repaid the loan in 2009.  If the nominal interest rate on the loan was 8 percent, then the real interest rate was
A.
B.
C.
D.
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