Glendale Community College » Economics » Econ 102 - Principles of Macroeconomics » Winter 2021

Question #1

When the inflation rate changes from 4% to 2%, this is an example of

A. hyperinflation

B. inflation

C. disinflation

D. deflation

Question #2

How is inflation a problem for some?

A. People working minimum wage jobs get automatic wage increases

B. People's purchasing power diminishes if their wages do not increase at the same rate as inflation

C. People's purchasing power increases if their wages do not increase at the same rate as inflation

D. The value of some stocks and properties increase over time

Question #3

The CPI in 2019 is 89 and the CPI in 2020 is 86. Calculate the inflation rate.

A. -3.49

B. 3.49

C. 3.37

D. -3.37%

Question #4

Which of the following is true about the CPI?

A. CPI is measured using constant prices

B. CPI is measured using a fixed basket of goods

C. CPI does not include imported goods

D. CPI includes government purchases