Inflation typically falls in recession and increases in good times.________ 2. The GDP deflator is a price index which fixes quantities in the base year.________ 3. The CPI typically shows a higher rate of inflation than the GDP deflator.________ 4. If the GDP deflator were 150 in 2022 and goes up to 160 in 2023, the inflationrate calculated in 2023 would be 10 percent.________ 5. One problem with the GDP deflator is that it neglects the substitution effect.________ 6. The real interest rate is the nominal interest rate divided by a price index.________ 7. Unexpected inflation will benefit banks and other lenders.________ 8. Falling prices automatically benefit all sectors of an economy.________ 9. Sudden and unexpected deflation is more likely to be harmful to economicgrowth than sudden and unexpected inflation.________ 10. Prices of goods and services which are labor-intensive tend to be stickyprices of goods that are raw materials intensive tend to be flexible
Inflation typically falls in recession and increases in good times.
________ 2. The
________ 3. The CPI typically shows a higher rate of inflation than the GDP deflator.
________ 4. If the GDP deflator were 150 in 2022 and goes up to 160 in 2023, the inflation
rate calculated in 2023 would be 10 percent.
________ 5. One problem with the GDP deflator is that it neglects the substitution effect.
________ 6. The real interest rate is the nominal interest rate divided by a price index.
________ 7. Unexpected inflation will benefit banks and other lenders.
________ 8. Falling prices automatically benefit all sectors of an economy.
________ 9. Sudden and unexpected deflation is more likely to be harmful to economic
growth than sudden and unexpected inflation.
________ 10. Prices of goods and services which are labor-intensive tend to be sticky
prices of goods that are raw materials intensive tend to be flexible
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