Podcast
Questions and Answers
What does the Consumer Price Index (CPI) reflect?
What does the Consumer Price Index (CPI) reflect?
- The current market value of a basket of goods and services (correct)
- The stock market value of goods and services
- The total number of goods and services purchased by a household
- The amount of money available for investment
Why is the Consumer Price Index (CPI) always calculated in relation to a base year?
Why is the Consumer Price Index (CPI) always calculated in relation to a base year?
- To compare the consumer purchasing power with previous years
- To reduce the overall inflation rate
- To track short-term fluctuations in prices
- To give an accurate reflection of the price of goods and services (correct)
What does an increase in the Consumer Price Index (CPI) indicate?
What does an increase in the Consumer Price Index (CPI) indicate?
- Investors have more money available to invest
- Investors need to use less money for expenses
- Less money available for investment and increased living expenses (correct)
- No significant impact on investment or living expenses
What happens to the purchasing power with a rise in the rate of inflation?
What happens to the purchasing power with a rise in the rate of inflation?
What is the term used to describe a fall in the general price level in an economy?
What is the term used to describe a fall in the general price level in an economy?
Why are items in the Consumer Price Index (CPI) basket weighted?
Why are items in the Consumer Price Index (CPI) basket weighted?
What is the index calculated by dividing the current market value of the CPI basket by its value in the base year, then multiplying by 100?
What is the index calculated by dividing the current market value of the CPI basket by its value in the base year, then multiplying by 100?
What economic indicator is the rate of change in the general price level over a year called?
What economic indicator is the rate of change in the general price level over a year called?
What impact does increased mobility of capital have?
What impact does increased mobility of capital have?
Why is sensitivity important in the world of investments?
Why is sensitivity important in the world of investments?
What is the role of banks in the economy according to the text?
What is the role of banks in the economy according to the text?
How do financial markets contribute to the long-term prosperity of an economy?
How do financial markets contribute to the long-term prosperity of an economy?
What happens when nations have low levels of savings according to the text?
What happens when nations have low levels of savings according to the text?
How do corporations typically finance the expansion of their operations?
How do corporations typically finance the expansion of their operations?
What effect does the growing amount of investment options have on investors?
What effect does the growing amount of investment options have on investors?
Why is the ability to convert idle savings into investment capital critical for an economy?
Why is the ability to convert idle savings into investment capital critical for an economy?
What is the formula to calculate the inflation rate as mentioned in the text?
What is the formula to calculate the inflation rate as mentioned in the text?
In the context of inflation, what is the impact of unanticipated inflation on lenders?
In the context of inflation, what is the impact of unanticipated inflation on lenders?
If the inflation rate is 4.8% and CPI was 105 in the current year, what was the CPI in the previous year?
If the inflation rate is 4.8% and CPI was 105 in the current year, what was the CPI in the previous year?
How does unanticipated inflation affect borrowers in terms of loan repayments?
How does unanticipated inflation affect borrowers in terms of loan repayments?
What happens to Terence's real income when prices rise by 5% according to the example provided in the text?
What happens to Terence's real income when prices rise by 5% according to the example provided in the text?
How does the redistribution of real income occur between lenders and borrowers due to unanticipated inflation?
How does the redistribution of real income occur between lenders and borrowers due to unanticipated inflation?
What does $102 represent in the example involving Caitlyn and Terence?
What does $102 represent in the example involving Caitlyn and Terence?
When prices rise by 5%, what amount would Terence need to buy what $100 bought a year ago?
When prices rise by 5%, what amount would Terence need to buy what $100 bought a year ago?
Which economic indicator is most directly related to the purchasing power of a currency?
Which economic indicator is most directly related to the purchasing power of a currency?
Which phase of the business cycle is characterized by a decline in economic activity?
Which phase of the business cycle is characterized by a decline in economic activity?
Which fiscal policy tool is most commonly used to stimulate the economy during a recession?
Which fiscal policy tool is most commonly used to stimulate the economy during a recession?
Which monetary policy tool is most commonly used to curb inflation?
Which monetary policy tool is most commonly used to curb inflation?
What role does the Bank of Canada play in the Canadian financial system?
What role does the Bank of Canada play in the Canadian financial system?
Which of the following economic indicators is lagging?
Which of the following economic indicators is lagging?
Which of the following is not an element of Canada's financial system?
Which of the following is not an element of Canada's financial system?
Which of the following is not a tool of monetary policy?
Which of the following is not a tool of monetary policy?
What is the main reason why corporations issue new shares?
What is the main reason why corporations issue new shares?
How does the exchange rate affect Jane's investment decision?
How does the exchange rate affect Jane's investment decision?
What is the role of an investment dealer in the issuance of new shares?
What is the role of an investment dealer in the issuance of new shares?
What is the meaning of the term 'primary market'?
What is the meaning of the term 'primary market'?
How does Jane's initial investment in U.S. dollars increase over time?
How does Jane's initial investment in U.S. dollars increase over time?
What is the main benefit of a private corporation going public?
What is the main benefit of a private corporation going public?
Why might a corporation issue new shares for the sale of an owner's share of the business?
Why might a corporation issue new shares for the sale of an owner's share of the business?
What is the relationship between the value of new shares and existing shares?
What is the relationship between the value of new shares and existing shares?
Flashcards are hidden until you start studying
