Question : 111.If a market basket of goods cost $100 in the : 1232909

111.If a market basket of goods cost $100 in the base year and $143 in a later year, then average prices have increased by:   

A. 243 percent.

B. 143 percent.

C. 70 percent.

D. 43 percent.

112.If a market basket of goods cost $100 in the base year and $108 in a later year, then average prices have increased by:   

A. 8 percent.

B. 92.5 percent.

C. 108 percent.

D. 208 percent.

113.The Full Employment and Balanced Growth Act of 1978 established a goal for inflation of _______ percent.   

A. Zero

B. One

C. Four to six

D. Under three

114.Price stability refers to:   

A. A constant average price level.

B. The absence of significant changes in the average price level.

C. An inflation rate of zero.

D. Increases in prices equal to or less than the growth rate of the economy.

115.The U.S. goal for price stability:   

A. Is an inflation rate of 3 to 6 percent.

B. Is an inflation rate of zero or less.

C. Changes each year based on economic performance.

D. Is an inflation rate of fewer than 3 percent.

116.The CPI tends to overestimate the rate of inflation because:   

A. Only the goods and services that consumers buy are included in the calculation.

B. Some price increases are an indication of higher quality products.

C. The CPI measures changes in average prices, not changes in relative prices.

D. Some price increases are simply the result of greedy producers and sellers.

117.The News Wire article in the text titled “Economy Sharpest decline in 26 years” “Economy Contracts in 3rd Quarter” discusses the reduction in output for the U.S. economy. Which type of unemployment is most likely in this situation?   

A. Structural

B. Frictional

C. Cyclical

D. Seasonal

118.Based on the News Wire article titled “Inflation and the Weimar Republic,” which of the following is the best illustration of the price effect of inflation?   

A. “Profits fell as employees demanded frequent wage adjustments”

B. “… businessmen traveling around the country found themselves borrowing funds from their customers each stage of the way. The cash they’d allocated for the entire trip barely sufficed to pay the way to the next stop”

C. “Those thrifty Germans who had placed their savings in corporate or government bonds saw their lifetime efforts come to naught”

D. “Debtors sought out creditors to pay them in valueless currency”

119.Based on the News Wire article titled “Inflation and the Weimar Republic,” which of the following is the best illustration of the wealth effect of inflation?   

A. “… businessmen traveling around the country found themselves borrowing funds from their customers each stage of the way. The cash they’d allocated for the entire trip barely sufficed to pay the way to the next stop.”

B. “Workers were often paid daily and sometimes two or three times a day …”

C. “Debtors sought out creditors to pay them in valueless currency.”

D. “Profits fell as employees demanded frequent wage adjustments.”

120.Based on the News Wire article titled “Inflation and the Weimar Republic,” which of the following is the best illustration of a change in relative prices due to hyperinflation?   

A. “Wholesale prices rose fortyfold . . . while retail prices rose even more rapidly.”

B. “Those thrifty Germans who had placed their savings in corporate or government bonds saw their lifetime efforts come to naught.”

C. “Workers were often paid daily and sometimes two or three times a day, so that they could buy goods in the morning before the inevitable afternoon price increase.”

D. “… businessmen traveling around the country found themselves borrowing funds from their customers each stage of the way. The cash they’d allocated for the entire trip barely sufficed to pay the way to the next stop.”