Flashcards in Macro Economics Chapter 07 Quiz Deck (10):
Inflation is an increase in:
A: prices of all products in the economy.
B: homes, autos and basic resources.
C: the general price level of products.
D: none of these.
Losers from inflation include:
A: Savers and borrowers.
B: landlords and the government.
C: borrowers and the government.
D: those on a fixed income and borrowers.
E: those on a fixed income and savers.
Union contracts with built-in cost-of-living adjustments and home mortgages that vary with the rate of inflation are:
A: inappropriate ways of combating inflation.
B: examples of bracket creep.
C: means of implementing fiscal policy.
D: steps that can be taken to decrease the adverse impacts of inflation.
E. examples of failed discarded policies of the 1970s.
Which one of the following groups benefits from inflation?
Suppose a market basket of goods and services costs $1,000 in the base year and the consumer price index (CPI) is currently 110. This indicates the price of the market basket of goods and services is now:
Deflation means a decrease in:
A: the rate of inflation.
B: the prices of all products in the economy.
C: homes, autos, and basic resources.
D: the general level of prices in the economy.
When the inflation rate rises, the purchasing power of nominal income:
A: remains unchanged.
D: changes by the inflation rate minus one.
The real interest rate is defined as the:
A: actual interest rate.
B: fixed-rate on consumer loans.
C: nominal interest rate minus the inflation rate.
D: expected interest rate minus the inflation rate
Demand-pull inflation occurs:
A: at or close to full employment.
B: because of excess total spending.
C: When "too much money is chasing too few goods."
D: all of these.