ECON 300 Final: Definitions of Inflation, Deflation, and CPI
68 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the term for a decrease in the general level of prices?

  • Disinflation
  • Deflation (correct)
  • Stagflation
  • Inflation

    • What is the formula to calculate the inflation rate?

  • CPI = current year cost/base year cost x 100
  • Inflation rate = (given year's CPI-previous year's CPI)/previous year's CPI x 100 (correct)
  • Real income = nominal income/CPI
  • Wealth = nominal income + CPI

    • What is the difference between nominal income and real income?

  • Nominal income is the actual number of dollars received, while real income is the value of goods and services
  • Real income is adjusted for inflation, while nominal income is not (correct)
  • Real income is the value of goods and services, while nominal income is the actual number of dollars received
  • Nominal income is adjusted for inflation, while real income is not

    • What is the type of inflation that results from an increase in the cost of production?

    <p>Cost-push inflation</p> Signup and view all the answers

    What is the term for a reduction in the rate of inflation?

    <p>Disinflation</p> Signup and view all the answers

    What is the formula to calculate real income?

    <p>Real income = nominal income/CPI</p> Signup and view all the answers

    What is the type of home loan with an interest rate that can change due to changes in CPI rates?

    <p>Adjustable rate mortgage</p> Signup and view all the answers

    What is the term for the actual interest rate without adjusting for inflation?

    <p>Nominal interest rate</p> Signup and view all the answers

    What is the primary determinant of the price level according to the Classical View?

    <p>Aggregate demand</p> Signup and view all the answers

    In which range of the aggregate supply curve does the economy experience full employment output?

    <p>Classical range</p> Signup and view all the answers

    What is the primary driver of economic growth according to the Keynesian View?

    <p>Aggregate demand</p> Signup and view all the answers

    What is the term for the simultaneous occurrence of high unemployment levels and rapid inflation?

    <p>Stagflation</p> Signup and view all the answers

    What is the relationship between the price level and real GDP supplied in the Keynesian range of the aggregate supply curve?

    <p>No change</p> Signup and view all the answers

    What is the sum of all individual demands for a particular good or service?

    <p>Market demand</p> Signup and view all the answers

    In which segment of the aggregate supply curve is the economy experiencing a severe recession?

    <p>Keynesian range</p> Signup and view all the answers

    What is the primary determinant of the quantity of goods and services produced in an economy?

    <p>Aggregate supply</p> Signup and view all the answers

    What is the effect of a rise in the price level on the real value of financial assets with fixed nominal value?

    <p>It decreases the real value</p> Signup and view all the answers

    Which of the following is a consequence of hyperinflation?

    <p>A wage-price spiral</p> Signup and view all the answers

    What is the direction of the aggregate demand curve?

    <p>Downward sloping</p> Signup and view all the answers

    What is the effect of a decrease in the price level on interest rates?

    <p>It decreases interest rates</p> Signup and view all the answers

    What is the effect of a decrease in the price level on net exports?

    <p>It increases net exports</p> Signup and view all the answers

    Which of the following is a consequence of speculation?

    <p>A shift in the production possibilities curve</p> Signup and view all the answers

    What is the effect of hyperinflation on the credit market?

    <p>It leads to a credit market collapse</p> Signup and view all the answers

    What is the effect of a wage-price spiral on the economy?

    <p>It leads to higher inflation</p> Signup and view all the answers

    What is the term for a change in the quantity supplied due to a change in the price of a good?

    <p>Movement</p> Signup and view all the answers

    What is the term for a market condition where the quantity supplied is less than the quantity demanded?

    <p>Shortage</p> Signup and view all the answers

    What is the term for a price control system that sets a maximum price that can be legally charged for a good or service?

    <p>Price ceiling</p> Signup and view all the answers

    What is the term for goods that are consumed jointly with each other?

    <p>Complementary goods</p> Signup and view all the answers

    What is the term for a change in the demand curve caused by a change in a non-price determinant?

    <p>Shift</p> Signup and view all the answers

    What is the term for a market condition where the quantity supplied is equal to the quantity demanded?

    <p>Equilibrium</p> Signup and view all the answers

    What is the term for a price control system that sets a minimum price that can be legally charged for a good or service?

    <p>Price floor</p> Signup and view all the answers

    What is the term for the horizontal sum of all individual quantities supplied by each seller in the market at each price?

    <p>Market supply</p> Signup and view all the answers

    What is the term for the principle that states a direct relationship between the price and quantity supplied?

    <p>Law of supply</p> Signup and view all the answers

    What is the term for two competing goods that a consumer can choose between?

    <p>Substitute goods</p> Signup and view all the answers

    What is the primary consequence of a wage-price spiral on the economy?

    <p>Stagflation</p> Signup and view all the answers

    What is the result of a rapid increase in the general price level on the real value of financial assets with fixed nominal value?

    <p>A decrease in the real value of financial assets</p> Signup and view all the answers

    What is the consequence of a decrease in the price level on aggregate demand?

    <p>An increase in aggregate demand</p> Signup and view all the answers

    What is the effect of hyperinflation on the credit market?

    <p>A decrease in borrowing and lending</p> Signup and view all the answers

    What is the relationship between the price level and the quantity of real GDP demanded?

    <p>Inverse</p> Signup and view all the answers

    What is the consequence of speculation on the economy?

    <p>A decrease in investment in technology and machines</p> Signup and view all the answers

    What is the effect of a decrease in the price level on the interest rate?

    <p>A decrease in the interest rate</p> Signup and view all the answers

    What is the consequence of hyperinflation on the economy?

    <p>Rapidly increasing prices and economic instability</p> Signup and view all the answers

    What is the term that measures the cost of all goods and services to a typical consumer?

    <p>CPI</p> Signup and view all the answers

    What is the formula to calculate the CPI?

    <p>current year cost/base year cost x 100</p> Signup and view all the answers

    What is the difference between nominal interest rate and real interest rate?

    <p>Nominal interest rate is not adjusted for inflation, while real interest rate is</p> Signup and view all the answers

    What is the term for a rise in the general price level resulting from an excess of total spending?

    <p>Demand Pull Inflation</p> Signup and view all the answers

    What is the formula to calculate the inflation rate?

    <p>(given year's CPI-previous year's CPI)/previous year's CPI x 100</p> Signup and view all the answers

    What is the term for a reduction in the rate of inflation?

    <p>Disinflation</p> Signup and view all the answers

    What is the term for a type of home loan with an interest rate that can change due to changes in CPI rates?

    <p>Adjustable Rate Mortgage</p> Signup and view all the answers

    What is the term for the value of the things you own?

    <p>Wealth</p> Signup and view all the answers

    What is the primary characteristic of the Keynesian view of the aggregate supply curve?

    <p>Demand creates its own supply</p> Signup and view all the answers

    What is the term for the total dollar amount of goods and services produced in an economy?

    <p>Real GDP</p> Signup and view all the answers

    Which range of the aggregate supply curve represents the economy approaching full employment output?

    <p>Intermediate range</p> Signup and view all the answers

    What is the consequence of both high unemployment levels and rapid inflation occurring simultaneously?

    <p>Stagflation</p> Signup and view all the answers

    What is the term for the behavior of consumers in making choices about what goods and services to buy?

    <p>Choice-making behavior</p> Signup and view all the answers

    What is the term for the sum of all individual demands for a particular good or service?

    <p>Market demand</p> Signup and view all the answers

    What is the characteristic of the Classical view of the aggregate supply curve?

    <p>Supply creates its own demand</p> Signup and view all the answers

    What is the term for the range of the aggregate supply curve where the economy is experiencing a severe recession?

    <p>Keynesian range</p> Signup and view all the answers

    What is the term for a market condition where the quantity supplied is greater than the quantity demanded?

    <p>Surplus</p> Signup and view all the answers

    What is the relationship between the price and quantity supplied according to the law of supply?

    <p>Direct</p> Signup and view all the answers

    What is the term for a change in the quantity demanded due to a change in the price of a good?

    <p>Movement</p> Signup and view all the answers

    What is the term for two competing goods for consumer purchase?

    <p>Substitute Goods</p> Signup and view all the answers

    What is the term for a price control system that sets a maximum price that can be legally charged for a good or service?

    <p>Price Ceiling</p> Signup and view all the answers

    What is the term for goods that are consumed jointly with each other?

    <p>Complementary Goods</p> Signup and view all the answers

    What is the term for a change in the demand curve caused by a change in a non-price determinant?

    <p>Shift</p> Signup and view all the answers

    What is the term for the curve showing the relation between the price of a good and the quantity producers are willing and able to sell?

    <p>Supply Curve</p> Signup and view all the answers

    What is the term for a market condition where the quantity supplied is equal to the quantity demanded?

    <p>Equilibrium</p> Signup and view all the answers

    What is the term for the horizontal sum of all individual quantities supplied by each seller in the market at each price?

    <p>Market Supply</p> Signup and view all the answers

    More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser