The term ______________ means unadjusted, gross, or current. The term __________ is used to refer to any statistic which has been adjusted for inflation.  On the expenditure side inflation will make GDP appear ______________ than it really is because it is reflected in market values.  These market values or _____________ are in nominal terms which include infl ation.  An increase in inflation will decrease __________ wages, rents, interest, and profits.

Q: When a nominal value increases it must be true that prices have increased. Select one: True False

A: Nominal value: face value of an asset or security.

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Q: The Consumer Price Index (CPI) is a measure of the average change in price over time from a…

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Q: The Consumer Price Index is subject to the substitution bias and the quality/new goods bias. Are the…

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Q: Deflation refers to a situation where price level falls price level rises the rate of inflation…

A: Deflation is one of the components of the business cycle. The business cycle refers to those…

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Q: Which among the following would be an indicator suggesting recession a. Discretionary purchases,…

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A: Recession is a situation in which economic activities of a country falls.

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Q: Calculate the rate of inflation when the Consumer Price Index went from 200 to 208.  Of the 200…

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Q: Justify the statement. TRUE/FALSE Nominal GDP adjusts for the inflation.

A: The entire monetary worth of all goods and services produced inside a nation's borders over a given…

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A: Consumer price index uses the value of a basket for a consumer because it considered the market…

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Q: Calculate inflation in 2019 and 2020.

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Q: When a nominal value is unchanged it must be true that prices have remained unchanged. Select one:…

A: Introduction: Nominal Value: It is the value or price of the commodity that does not include…

Q: If your nominal income rose by 5.3 percent and the price level rose by 3.8 percent in some year, by…

A: Real income is income adjusted for inflation where nominal income does not account for price…

Q: If your nominal income in 2016 was $50,000, and prices doubled between 2016 and 2017, to have the…

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Q: Question 18   You borrow money for a new car at a rate of 5%; inflation is at 4%. From this…

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Q: real value will increase only when prices increase. Select one: True False If the real value for…

A: The nominal values do not reflect true change in the quantities or real GDP. it is the real GDP…

Q: When real GDP is greater than potential GDP, there is ________ which leads the inflation rate to…

A: Inflation can be defined as a rise in the overall price of all products and services in an economy…

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A: The answer to the question is as follows :