Home / Questions / Which of the following measures gives the earliest warning of increasing inflation? A) t
Which of the following measures gives the earliest warning of increasing inflation?
A) the Consumer Price Index
B) the Producer Price Index
C) the GDP deflator
D) all of these should signal the same short-run inflation
72) The price index that measures the changes in prices of ALL goods and services produced by the economy is the
A) CPI.
B) PPI.
C) GDP deflator.
D) fixed-quantity index.
73) The CPI is an accurate measure of inflation for
A) farmers.
B) an elderly couple recently retired to Vernon, British Columbia.
C) Apple Computer.
D) a family who consumes the market basket used to calculate the index.
74) The CPI tends to overstate the true inflation rate because
A) we cannot know what the true inflation rate is.
B) it fails to consider the effects of new products in the marketplace.
C) the market basket actually selected is inappropriate.
D) the market basket fails to weigh housing costs sufficiently.
75) The CPI tends to overstate the true inflation rate because
A) we cannot know what the true inflation rate is.
B) changes in product quality are not taken into account.
C) the market basket actually selected is inappropriate.
D) the market basket fails to weigh housing costs sufficiently.
76) The CPI may be an inaccurate measure of changes in the price level because
A) consumers rarely switch to less expensive products when the price of a particular good increases.
B) it is a changing quantity index.
C) changes in product quality are not taken into account.
D) the market basket of goods was determined arbitrarily by the government without conducting surveys of spending patterns.
77) The CPI may be an inaccurate measure of changes in the price level because
A) consumers rarely switch to less expensive products when the price of a particular good increases.
B) it is a changing quantity index.
C) consumers can substitute higher priced goods when the price of a particular good increases.
D) the market basket of goods was determined arbitrarily by the government without conducting surveys of spending patterns.
78) The Consumer Price Index attempts to measure
A) the average of raw material prices paid by producing firms.
B) the level of prices with respect to goods and services purchased by wage earners in urban areas.
C) the level of prices with respect to goods and services purchased by retired couples in rural areas.
D) hourly wage rates of manufacturing workers.
79) Typically, nominal interest rates and anticipated inflation rates
A) move in opposite directions.
B) are not related.
C) move in the same direction.
D) are such that the nominal rate is one-half the anticipated rate.
80) Unanticipated positive inflation will create
A) losses for creditors and gains for debtors.
B) losses for both creditors and debtors.
C) gains for both creditors and debtors.
D) gains for creditors and losses for debtors.
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