CH19 Practcice Quiz
Question 1
0 out of 10 points
Prices of finished imported goods are
Selected Answer: not included in the CPI because the goods were produced outside the country
Answers:
not included in the CPI because the goods were produced outside the country
not included in the CPI because different countries choose different base periods
not included in the CPI because import prices are not denominated in U.S. dollars
not included in the CPI because most imports are raw materials
included in the CPI
Question 2
10 out of 10 points
If prices (as measured by the CPI) tripled and nominal wages tripled, what would happen to real wages?
Selected Answer: They would remain unchanged.
Answers:
They would triple.
They would remain unchanged.
They would increase by one-third.
They would decrease by one-third.
They would increase by a factor of nine.
Question 3
10 out of 10 points
Assume that Ernesto earned a nominal wage rate of $15 per hour in 2001, the base year for the CPI. If the CPI in 2002 was 102.6 and his nominal wage rate was $16 per hour, what was his real wage rate in 2001?
Selected Answer: $15.00
Answers:
$14.62
$15.00
$15.59
$16.00
His real wage for 2001 cannot be determined with the information given.
Question 4
10 out of 10 points
A real variable is
Selected Answer: measured in terms of purchasing power
Answers:
measured in terms of after-tax dollars
measured in terms of dollars and not foreign currency
measured in nominal terms
measured in terms of current dollars
measured in terms of purchasing power
Question 5
10 out of 10 points
The consumer price index includes all of the following goods and services except
Selected Answer: bonds of US corporations
Answers:
bonds of US corporations
French wine
Japanese VCRs
used cars
toiletries
Question 6
0 out of 10 points
The resource cost of inflation refers to
Selected Answer: the resources lost due to asking for higher nominal
0 out of 10 points
Prices of finished imported goods are
Selected Answer: not included in the CPI because the goods were produced outside the country
Answers:
not included in the CPI because the goods were produced outside the country
not included in the CPI because different countries choose different base periods
not included in the CPI because import prices are not denominated in U.S. dollars
not included in the CPI because most imports are raw materials
included in the CPI
Question 2
10 out of 10 points
If prices (as measured by the CPI) tripled and nominal wages tripled, what would happen to real wages?
Selected Answer: They would remain unchanged.
Answers:
They would triple.
They would remain unchanged.
They would increase by one-third.
They would decrease by one-third.
They would increase by a factor of nine.
Question 3
10 out of 10 points
Assume that Ernesto earned a nominal wage rate of $15 per hour in 2001, the base year for the CPI. If the CPI in 2002 was 102.6 and his nominal wage rate was $16 per hour, what was his real wage rate in 2001?
Selected Answer: $15.00
Answers:
$14.62
$15.00
$15.59
$16.00
His real wage for 2001 cannot be determined with the information given.
Question 4
10 out of 10 points
A real variable is
Selected Answer: measured in terms of purchasing power
Answers:
measured in terms of after-tax dollars
measured in terms of dollars and not foreign currency
measured in nominal terms
measured in terms of current dollars
measured in terms of purchasing power
Question 5
10 out of 10 points
The consumer price index includes all of the following goods and services except
Selected Answer: bonds of US corporations
Answers:
bonds of US corporations
French wine
Japanese VCRs
used cars
toiletries
Question 6
0 out of 10 points
The resource cost of inflation refers to
Selected Answer: the resources lost due to asking for higher nominal