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Questions and Answers
What does inflation measure?
What does inflation measure?
- The rate of change in the cost of a specific good
- The rate of change in the unemployment rate
- The rate of change in the average income of households
- The rate of change in average prices of goods and services consumed by households (correct)
What is the Consumer Price Index (CPI) based on?
What is the Consumer Price Index (CPI) based on?
- The average cost of a standard set of goods and services consumed by an average household (correct)
- The average cost of luxury goods and services
- The average income of households
- The average cost of imported goods
How is inflation usually gauged?
How is inflation usually gauged?
- By the annual percentage change in the unemployment rate
- By the annual percentage change in the GDP
- By the annual percentage change in the average income of households
- By the annual percentage change in the Consumer Price Index (CPI) (correct)
What is included in the CPI basket?
What is included in the CPI basket?
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What does low and stable inflation typically indicate?
What does low and stable inflation typically indicate?
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