Question : 7.3   Nominal and Real Values 1) The difference between nominal and : 1240917

7.3   Nominal and Real Values

1) The difference between nominal and real is

A) nominal is measured in current dollars and real is measured in dollars of a given year.

B) real is measured in current dollars and nominal is measured in dollars of a given year.

C) nominal is a number stated in dollars and real is stated with an index number.

D) real is a number stated in dollars and nominal is stated with an index number.

E) both nominal and real are measured with index numbers, only the nominal index is greater than 100 and the real index is less than 100.

2) When the nominal price of a good increases over time, the real cost of buying the good

A) must increase.

B) decreases because income also increases over time.

C) does not change because income also increases over time.

D) might increase, decrease, or stay the same depending on how much the CPI changed.

E) might increase, decrease, or stay the same depending on how much income changed.

3) To compare the price of a loaf of bread produced in 1993 with the price of a loaf produced in this year, you should compare the value of the bread in

A) real prices.

B) nominal prices.

C) real quantity.

D) nominal quantity.

E) CPI quantity.

4) To compare the real price of gas in 1975 to the real price in 2013, we need to know

A) just the two nominal prices in both years.

B) the two prices in both years and the inflation rate in 2013.

C) the two prices in both years and the CPI in both years.

D) the two prices in both years and the two interest rates in both years.

E) the two prices in both years and the two inflation rates in both years.

5) Suppose the CPI in 1983 is 100 and the CPI this year is 172. These values for the CPI mean that

A) inflation between the two years was 172 percent.

B) typically, a good whose price was $100 in 1983 had a price of $172 this year.

C) typically, a good whose price was $172 in 1983 had a price of $100 this year.

D) typically, a good whose price was $100 in 1983 had a price of $139 this year.

E) typically, a good whose price was $100 in 1983 had a price of $58 this year.

6) February 2010, the price of gasoline in the Florida was $2.629 per gallon and the CPI was 202.4 with a base period of 1982 to 1984. What was the real price of gasoline per gallon in base period dollars?

A) $2.629 per gallon

B) $1.00 per gallon

C) $1.29 per gallon

D) $5.32 per gallon

E) $1.809 per gallon

7) If the price of a soda was 15 cents in 1970, when the CPI was 50, and 50 cents in 2007 when the CPI was 172, then the real price of

A) a soda has risen 567 percent.

B) a soda has risen 350 percent.

C) the 1970 soda in 2007 dollars is 52 cents.

D) the 2007 soda in 1970 dollars is $3.44.

E) the soda was 15 cents in 1970 and 50 cents in 2007.

8) If average annual tuition at public 4-year colleges was $1,908 in 1990, when the CPI was 130.7, and $8,655 in 2012 when the CPI was 229.6, then the real cost of annual tuition

A) rose by 158 percent during that period.

B) rose by 354 percent during that period.

C) rose by 75.7 percent during that period.

D) fell by 158 percent during that period.

E) fell by 354 percent during that period.

9) If the price of a soda was 15 cents in 1970, when the CPI was 50, and 50 cents in 2007, when the CPI was 172, then

A) prices on average have increased 567 percent.

B) prices on average have increased 244 percent.

C) the price of the soda was greater in real value in 1970 than in 2007.

D) the price of a soda has increased a greater percentage than the CPI.

E) the real price of a soda is the same in 1970 and 2007.

10) In June 1960, the price of gasoline in the Midwest was $0.169 per gallon and the CPI was 29.6 with a base period of 1982 to 1984. What was the real price of gasoline per gallon in base period dollars?

A) $0.05 per gallon

B) $0.057 per gallon

C) $0.169 per gallon

D) $0.571 per gallon

E) $0.296 per gallon