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1. The CPI is more commonly used as a gauge of inflation than the GDP deflator is because the a. CPI is easier to measure. b. CPI includes more goods and services that the GDP deflator does. c. CPI better reflects the goods and services bought by consumers. d. GDP deflator cannot be used to gauge inflation.

1. The CPI is more commonly used as a gauge of inflation than the GDP deflator is because the a. CPI is easier to measure. b. CPI includes more goods and services that the GDP deflator does. c. CPI better reflects the goods and services bought by consumers. d. GDP deflator cannot be used to gauge inflation.

Exploring Economics
Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations
Section: Chapter Questions
Problem 13P
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1. The CPI is more commonly used as a gauge of inflation than the GDP deflator is because the a. CPI is easier to measure. b. CPI includes more goods and services that the GDP deflator does. c. CPI better reflects the goods and services bought by consumers. d. GDP deflator cannot be used to gauge inflation. 2. If Year 1 is the base year and Year 2 is the following year, then the inflation rate in Year 2 equals a. [(CPI in Year 2 – CPI in Year 1)/CPI in Year 1] x 100. b. [(CPI in Year 2 - CPI in Year 1)/CPI in Year 2] × 100. c. [(CPI in Year 1- CPI in Year 2)/CPI in Year 1] x 100. d. [(CPI in Year 1- CPI in Year 2)/CPI in Year 2] x 100. 3. Given that Clara's income exceeds her expenditures, Clara is best described as a a. saver or as a supplier of funds. b. borrower or as a demander of funds. c. saver or as a demander of funds. d. borrower or as a supplier of funds. 4. Long-term bonds are a. riskier than short-term bonds, and so interest rates on long-term bonds are usually lower than interest rates on short-term bonds. b. riskier than short-term bonds, and so interest rates on long-term bonds are usually higher than interest rates on short-term bonds. c. less risky than short-term bonds, and so interest rates on long-term bonds are usually lower than interest rates on short-term bonds. d. less risky than short-term bonds, and so interest rates on long-term bonds are usually higher than interest rates on short-term bonds. 5. Consider the expressions T- G and Y- T– C. Which of the following statements is correct? a. Each one of these is equal to national saving. b. Each one of these is equal to public saving. c. The first of these is private saving; the second one is public saving. d. The first of these is public saving; the second one is private saving.
Transcribed Image Text:1. The CPI is more commonly used as a gauge of inflation than the GDP deflator is because the a. CPI is easier to measure. b. CPI includes more goods and services that the GDP deflator does. c. CPI better reflects the goods and services bought by consumers. d. GDP deflator cannot be used to gauge inflation. 2. If Year 1 is the base year and Year 2 is the following year, then the inflation rate in Year 2 equals a. [(CPI in Year 2 – CPI in Year 1)/CPI in Year 1] x 100. b. [(CPI in Year 2 - CPI in Year 1)/CPI in Year 2] × 100. c. [(CPI in Year 1- CPI in Year 2)/CPI in Year 1] x 100. d. [(CPI in Year 1- CPI in Year 2)/CPI in Year 2] x 100. 3. Given that Clara's income exceeds her expenditures, Clara is best described as a a. saver or as a supplier of funds. b. borrower or as a demander of funds. c. saver or as a demander of funds. d. borrower or as a supplier of funds. 4. Long-term bonds are a. riskier than short-term bonds, and so interest rates on long-term bonds are usually lower than interest rates on short-term bonds. b. riskier than short-term bonds, and so interest rates on long-term bonds are usually higher than interest rates on short-term bonds. c. less risky than short-term bonds, and so interest rates on long-term bonds are usually lower than interest rates on short-term bonds. d. less risky than short-term bonds, and so interest rates on long-term bonds are usually higher than interest rates on short-term bonds. 5. Consider the expressions T- G and Y- T– C. Which of the following statements is correct? a. Each one of these is equal to national saving. b. Each one of these is equal to public saving. c. The first of these is private saving; the second one is public saving. d. The first of these is public saving; the second one is private saving.
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