#1
What does the Consumer Price Index (CPI) measure?
Inflation in consumer goods and services
ExplanationMeasures inflation in consumer goods and services.
#2
What is the main purpose of the Producer Price Index (PPI)?
Assessing changes in producer costs
ExplanationAssesses changes in producer costs.
#3
What is the difference between nominal GDP and real GDP?
Nominal GDP includes inflation, while real GDP adjusts for inflation
ExplanationNominal GDP includes inflation, while real GDP adjusts for inflation.
#4
What is the Quantity Theory of Money's explanation for inflation?
Inflation results from excessive money supply growth
ExplanationExplains inflation as resulting from excessive money supply growth.
#5
Which index is commonly used to measure changes in the cost of living over time?
Consumer Price Index (CPI)
ExplanationCommonly used to measure changes in the cost of living over time.
#6
Which of the following is a consequence of hyperinflation?
Economic instability and uncertainty
ExplanationLeads to economic instability and uncertainty.
#7
What is the relationship between inflation and interest rates according to the Fisher effect?
Higher inflation leads to higher nominal interest rates
ExplanationHigher inflation results in higher nominal interest rates.
#8
In macroeconomics, what is the Phillips Curve used to illustrate?
The relationship between unemployment and inflation
ExplanationIllustrates the relationship between unemployment and inflation.
#9
What is the meaning of the term 'core inflation'?
Inflation excluding volatile food and energy prices
ExplanationInflation excluding volatile food and energy prices.
#10
What is the primary tool used by central banks to control inflation?
Monetary policy
ExplanationPrimary tool used by central banks to control inflation.
#11
Which index measures the average change in prices received by domestic producers for their output?
Producer Price Index (PPI)
ExplanationMeasures the average change in prices received by domestic producers for their output.
#12
What is the difference between demand-pull inflation and cost-push inflation?
Demand-pull is caused by excessive demand, while cost-push is caused by increased production costs
ExplanationDemand-pull results from excessive demand, while cost-push results from increased production costs.
#13
Which of the following is a common measure of inflation expectations?
Consumer Confidence Index (CCI)
ExplanationCommon measure of inflation expectations.
#14
According to monetarist theory, what is the primary cause of inflation?
Excessive money supply growth
ExplanationPrimary cause of inflation is excessive money supply growth.
#15
Which price index is often used to adjust wages for inflation?
Gross Domestic Product (GDP) deflator
ExplanationOften used to adjust wages for inflation.