Chapter 22 Quiz Inflation

A payment is said to be ________________ if it is automatically adjusted for inflation. A.) cross referenced B.) indexed C.) matched D.) maintained

When a price, wage, or interest rate is adjusted automatically with inflation, it is said to be ______________. A.) indexed B.) COLAed C.) nominally adjusted D.) semi-indexed

What distinguishes the real value of a statistic from the nominal value of a statistic? A.) time of announcement B.) adjusting for inflation C.) adjusting for GDP deflator D.) real interest rate

If the price index moves from 107 to 110, the rate of inflation is: A.) 3% B.) 30% C.) 28% D.) 2.80%

With regard to the economy, the term negative inflation is synonymous with which of the following? A.) recession B.) depression C.) deflation D.) hyperinflation

The effect of substitution bias is that the rise in the price of a fixed basket of goods over time tends to ___________________________ the rise in a consumer's true cost of living, because it doesn't take into account that the person can substitute between goods according to changes in their relative prices. A.) stabilize B.) understate C.) overstate D.) reduce

When we want to measure wage inflation in the labor market, we use the: A.) Consumer Price Index B.) Product Price Index C.) Employment Cost Index D.) Employment Price Index

One of the reasons that a rise in the price of a fixed basket of goods over time tends to overstate the rise in a consumer's true cost of living is: A.) substitution bias B.) attribution bias C.) complimentary bias D.) preference bias

One factors that complicate the calculation of the inflation rate is: A.) quality bias sometimes called new product bias B.) preferential bias C.) complimentary product bias D.) consumer behavior bias

The percentage change in the price level from one-time period to the next, whether the price level is measured in terms of money is the ________________. A.) inflation rate B.) price index rate C.) consumer price index D.) producer price index