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- Question 13: (a) The consumer price index (CPI) is the most commonly used measure of changes in the general level of prices in Australia. Discuss some shortcomings of using the CPI to measure the cost of living. (b) Why do some people 'lose' from inflation and why do some people 'win' from inflation?ble bles 18 Illustrations Add- ins Y 凹 Online Videos Media (c) Investment Click or tap here to enter text. (d) Aggregate demand Click or tap here to enter text. 1081 words (b) Short-term money market interest rates Click or tap here to enter text. (e) Aggregate supply Click or tap here to enter text. (f) economic activity Click or tap here to enter text. (g) Inflation Click or tap here to enter text. Links Comment Question 5: If the central bank sells government securities from the private sector-money markets other things being equal, what would the effect be on the following? (a) The economy's monetary base Click or tap here to enter text. (h) Unemployment Click or tap here to enter text. Comments D Header & Footer ✓ A Ω Text Symbols Question 6: Assume an economy operates in the intermediate range of its aggregate supply English (Australia) Text Predictions: On Focus 283- A country is said to be experiencing inflation when A- the goods-market is rising over time B- prices of all goods and services are rising over time C- Total output is falling over time D- prices of all goods and services are falling over time
- Which of the following statements is TRUE? (A) Official inflation data are often reliable. (B) It is truly wonderful to simp! It’s a vibe. (C) The CPI includes producer goods. (D) The GDP deflator can be used to measure inflation.8. The price of oil in 2005 was 5067 per barrel. "This price is still lower than the price of oil in 1991" says a government publication. If inflation has averaged 3.2% per year from 1991 to 2020, what was the price per barrel of oil in 1991?(a) Distinguish between the consumer price index (CPI) and the producer price index (PPI). (b) Why can the PPI be useful for predicting changes in the CPI?
- Practice Your Knowledge of Business Cycles. Explain each of your choices. (A) For two straight quarters, business inventories increase at a sharp rate. This most likely indicates * an expanding economy * a recovering economy the beginning of * a recession an increase in inflation * a record unemployment rate (B) At which point in the business cycle is there the largest inflationary gap? * The peak *The trough * During expansion During contraction * At full employment (C) If the consumer price index begins to increase dramatically, which of the following is likely true? * The output gap is positive and near the peak. * The output gap is positive and near the trough. * There is no output gap and the economy is growing. * The output gap is negative and near the peak. The output gap is negative and near the trough.S country's real GDP rose from 500 to 550, while its nominal GDP increased from 600 to 770. What is the country's inflation rate? A.) 16.7% B.) 20% C.) -14% D.) -20%Question 5 Table below shows the consumer price index for the year 2015 and 2016. Year Consumer Price Index (CPI) 2015 2016 124 135 (a) Based on the table above, i. Calculate the rate of inflation for the year of 2016. i. Explain THREE (3) effects of inflation. Suggest any FOUR (4) measures or policies that the government can take to overcome the problem of inflation. (b)
- Question 5 Investment in Country X increased from $4.445 million in 1998 to $4.909 million in 1999 at current market prices. In the same period, according to a government report, overall economic growth in Country X was 3.8%. (a) What is meant by investment? (b) In the first sentence of the article you will find the phrase ‘current market prices’. What does this mean? (c) Define what is meant by economic growth. (d) Explain the link between a rise in investment and a rise in economic growth. (e) Explain what benefits economic growth can bring to a country.(a)“Substitution bias generally causes the CPI to understate the actual increases in the cost of living.” True or False? Explain. (b) “Like the CPI, the GDP deflator is subject to substitution bias.” True or false? Explain. (c) “Unmeasured quality change generally causes the CPI to overstate the actual increases in the cost of living.” True or false? Explain. (d) In compiling data for the CPI, the Bureau of Labor Statistics makes no attempt to adjust the data to reflect quality changes.” True or false? Explain.5. The country with the consistently lowest inflation rate over 1980-2010 is a) Japan b) Germany c) the United Kingdom d) Mexico e) the United States.