Question : 61.We calculate many different kinds of price indexes: A. in order to : 1379070

61.We calculate many different kinds of price indexes:

A. in order to capture a complete picture of how price changes are affecting the economy.

B. to see how the prices of different groups of goods are changing.

C. to measure how different groups of people in the economy are being affected by changing prices.

D. All of these statements are true.

62.The GDP deflator:

A. measures price changes for everything produced in the country.

B. doesn’t include goods produced abroad.

C. is computed using the quantities that are produced in the economy each year.

D. All of these statements are true.

63.The GDP deflator differs from the CPI in its measurement of inflation in that:

A. it measures the price changes of all goods, not just those in a typical consumer’s basket.

B. it uses the total quantities that are produced, not the ratio of what a typical consumer might consume.

C. it does not include imports, which may have a real effect on the typical consumer’s cost of living.

D. All of these statements are true.

64.In practice, the three measurements of inflation, the CPI, PPI, and GDP deflator:

A. all closely track each other.

B. are all positively correlated.

C. all measure inflation, but focus on different parts of the economy.

D. All of these statements are true.

65.We translate nominal income in any past year into constant, real dollars to:

A. allow us to compare changes in purchasing power over time.

B. see what an income we were earning in the past would be equivalent to today.

C. understand what a salary in the past would equal in current dollars to determine how much more we have actually gained in purchasing power.

D. All of these statements are true.

66.When someone tells you they made $17,000 in 1970:

A. it is difficult to tell from that number if the person was well off or not, because prices have changed so much since then.

B. the income should be adjusted into current dollars to clearly understand what that salary is “worth” in terms of purchasing power.

C. it is a nominal figure that is hard to understand. A real figure would be more helpful.

D. All of these statements are true.

67.Suppose we want to know how much money your grandparents would have to earn now to have purchasing power equivalent to their income in 1969. We could:

A. translate their nominal income in 1969 into constant, real dollars of today.

B. translate their nominal income today into 1969 dollars.

C. take a ratio of their income today with their income from 1969.

D. None of these statements is true.

68. 

Using the information in the table shown, what is the 2009 value of the salary listed in 1979?

A. $127,828

B. $14,643

C. $57,824

D. $504,766

69. 

How can we use the information from the table shown to compare the real value of the 1979 salary to that of the one earned in 2009?

A. You can see that the salary has increased from $43,265 to $170,844.

B. You need to put the 2009 salary into real 2009 terms to compare it to 1979.

C. You need to put both salaries into real dollars in the same year for comparison.

D. There is no real way to compare the two.

70. 

If the 1989 salary in 2009 dollars is $147,951, how do we interpret this?

A. The salary earned in 1989 could have purchased the same amount of goods as $147,951 could buy in 2009.

B. It would take $147,951 in 2009 to buy the same amount of goods that was purchased in 1989 with $85,529.

C. Someone earning $85,529 in 1989 would be as well off if he were earning $147,951 in 2009.

D. All of these are correct interpretations.