1. The CPI is more commonly used as a gauge of inflation than the GDP deflator is because thea. 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 gaugeinflation.2. If Year 1 is the base year and Year 2 is the following year, then the inflation rate in Year 2 equalsa. [(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 aa. 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 area. riskier than short-term bonds, and so interest rates on long-term bonds are usually lower than interest rates onshort-term bonds.b. riskier than short-term bonds, and so interest rates on long-term bonds are usually higher than interest rates onshort-term bonds.c. less risky than short-term bonds, and so interest rates on long-term bonds are usually lower than interest rateson short-term bonds.d. less risky than short-term bonds, and so interest rates on long-term bonds are usually higher than interest rateson 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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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.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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