Mod 15 Quiz

The ______ is the most widely used measure of inflation in the United States.

• producer price index

• consumer price index

• GDP deflator

• national income account

• growth rate of real GDP

If the cost of a market basket is $200 in Year 1 and $230 in Year 2, the price index for Year 2 with a Year 1 base is:

• 100.

• 90.

• 130.

• 200.

• 115.

The purpose of indexing Social Security payments to the CPI is to:

• increase corporate profits.

• justify continued government funding of the Bureau of Labor Statistics.

• avoid the privatization of Social Security.

• increase government tax revenue.

• maintain the purchasing power of retirees.

Inflation can be measured by:

• the percentage change in the CPI.

• the absolute change in the CPI.

• the absolute change in the GDP deflator.

• the percentage change in nominal GDP.

• the percentage change in real GDP.

If the CPI is 120 in Year 1 and 150 in Year 2, then the rate of inflation from Year 1 to Year 2 is _____.

• 10%

• 20%

• 25%

• 50%

• 100%