When there is deflation in the economy: a) the general price level becomes negative b) the general price level falls c) the general price level increases d) the inflation rate falls
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- The steps involved in calculating the consumer price index, in order, are as follows: * Choose a base year, fix the basket, compute the inflation rate, compute the basket's cost, and compute the index. Choose a base year, find the prices, fix the basket, compute the basket's cost, and compute the index. Fix the basket, find the prices, compute the basket's cost, choose a base year and compute the index. Fix the basket, find the prices, compute the inflation rate, choose a base year and compute the index.Question 11 of 25, Step 1 of 1 T A basket of goods and services is used to calculate the consumer price index (CPI) in Country A. The weight of food and beverages is 10% of the whole basket. The average household's budget on food and beverages was $7,500 in 2010 (base year) and increased by $500 in 2015. Assuming the increase in the rate of spending on food and beverages matched the inflation rate, calculate the inflation rate between 2010 and 2015. Round your answer to two decimal places if necessary.Officially consumer price inflation occurs when there is Inflation is measured by calculating A) one-time increase in the general price level measured using GDP Deflator; a price level. B) a one-time increase in wages; a price index. C) an increase in the price level measured using CPI; the percentage change in a price index from one year to the next. D) a sustained increase in wages and GDP Deflator; the percentage difference between the price level and a price index.
- If the inflation rate was 1% in 2014, 3% in 2015, and 2% in 2016, this economy experienced from 2014 to 2015, and from 2015 to 2016. a) inflation; inflation b) disinflation; deflation c) inflation; deflation d) inflation; disinflationWhat is the main measure used to track inflation in most countries? a) Gross Domestic Product (GDP) b) Consumer Price Index (CPI) c) Producer Price Index (PPI) d) Unemployment Rate When the rate of inflation exceeds the rate of interest, what is the likely effect on savers? a) Real interest rates increase b) Real interest rates decreaseIf my nominal wages go up 5% this year and inflation is 2% this year, what happened? a) All of the choices are correct. b) I experience an increase in my both my nominal income and in my real income. c) My nominal wages increased more than the increase in the overall price level. d) My real wages increased by approximately 3%