58) Consumers in a country buy only two goods, sneakers and manicures. The prices and
quantities purchased by urban households are in the table above. The reference base year
is 2011. The inlation rate between 2011 and 2012 is
A) $15.
B) 15.0 percent.
C) $10.
D) 10.3 percent.
E) 9.0 percent.
Skill: Level 3: Using models
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
Item
Quantity
(2013) Price (2013)
Quantity
(2014) Price (2014)
Magazines 400 $5.00 450 $4.50
Movie
tickets 50 $6.00 200 $8.00
Pizzas 100 $10.00 120 $10.50
The data in the table above shows the consumption by families in an economy. The year
2013 is the reference base period.
59) Based on the table above, the cost of the base period market basket in the base period
is
A) $3,300.
B) $21.00.
C) $3,250.
D) $4,650.
E) $4,885.
Skill: Level 4: Applying models
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
21
60) The information in the above table gives the 2000 base period market basket and prices
used to construct the CPI for a small nation. The table also has 2010 prices. What is the
value of the CPI for the base period 2000?
A) 140
B) 133
C) 100
D) 75
E) 30
Skill: Level 4: Applying models
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
61) The information in the above table gives the 2000 base period market basket and prices
used to construct the CPI for a small nation. The table also has 2010 prices. What is the
value of the CPI for 2010?
A) 140
B) 133
C) 100
D) 71.4
E) 142
Skill: Level 4: Applying models
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
22
Item
Quantity
(2013) Price (2013)
Quantity
(2014) Price (2014)
Magazines 400 $5.00 450 $4.50
Movie
tickets 50 $6.00 200 $8.00
Pizzas 100 $10.00 120 $10.50
The data in the table above shows the consumption by families in an economy. The year
2013 is the reference base period.
62) Based on the table above, the cost of the base period market basket in 2013 is
A) $3,300.
B) $4,885.
C) $4,650.
D) $3,885.
E) None of the above answers is correct.
Skill: Level 4: Applying models
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
63) Based on the table above, the CPI for 2013 is
A) 100.
B) 98.5.
C) 102.5.
D) 5.0%.
E) 105.1.
Skill: Level 4: Applying models
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
64) Based on the table above, the CPI for 2014 is
A) 98.5.
B) 105.1.
C) 102.5.
D) 5.0 percent.
E) 100.
Skill: Level 4: Applying models
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
65) Based on the table above, between 2013 and 2014, the inlation rate in this country was
A) -1.5 percent.
B) 105.1 percent.
C) 2.5 percent.
D) 98.5 percent.
E) -2.5 percent.
23
Skill: Level 4: Applying models
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
66) A country reports the total expenditures on the ixed CPI basket for the past three
years. The cost of the CPI basket in 2010 was $23,000, the cost of the CPI basket for the
reference base period, 2011, was $23,805, and the cost of the CPI basket in 2012 was
$24,500. The CPI for 2010 is
A) 96.6.
B) 100.0.
C) 103.5.
D) 106.5.
E) 23.0.
Skill: Level 3: Using models
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
67) A country reports the total expenditures on the ixed CPI basket for the past three
years. The cost of the CPI basket in 2010 was $23,000, the cost of the CPI basket for the
reference base period, 2011, was $23,805, and the cost of the CPI basket in 2012 was
$24,500. The CPI for 2012 is
A) 93.9.
B) 97.2.
C) 102.9.
D) 106.5.
E) 245.0.
Skill: Level 3: Using models
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
24
68) When the CPI rises ________, the inlation rate is ________.
A) steadily; zero
B) rapidly; high
C) slowly; high
D) rapidly; low
E) rapidly; either high, low, or zero depending on whether production of output is
increasing, decreasing, or not changing.
Skill: Level 1: Deinition
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
69) The inlation rate is the
A) percentage change in the composition of the CPI market basket from the base year to
the next year.
B) percentage change in the CPI from one year to the next year.
C) diference between the current period CPI and the base period CPI.
D) diference between the base period CPI and the current period CPI.
E) diference in the price level from one year to the next multiplied by 100.
Skill: Level 1: Deinition
Section: Checkpoint 7.1
Status: Old
AACSB: Relective thinking
70) The inlation rate measures the
A) average price of the goods and services consumed by urban consumers.
B) percentage change in the CPI from one year to the next year.
C) cost of the CPI market basket at current period prices divided by the cost of the CPI
market basket at base period prices.
D) percentage change in the quantity of goods and services consumed by urban consumers.
E) cost of the CPI market basket at base period prices divided by the cost of the CPI market
basket at current period prices.
Skill: Level 1: Deinition
Section: Checkpoint 7.1
Status: Old
AACSB: Relective thinking
25
71) Which of the following formulas is used to calculate the inlation rate?
A) inlation rate = 100 ×
B) inlation rate = 100 ×
C) Inlation rate = 100 ×
D) Inlation rate = 100 ×
E) inlation rate = 100 ×
Skill: Level 1: Deinition
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
72) If the CPI is 231.4 in one year and is 241.2 in the next year, then the inlation rate
equals
A) (241.2 – 231.4) × 100.
B)
231.4
231.4 – 241.2
× 100.
C)
241.2
231.4 – 241.2
× 100.
D)
231.4
241.2 – 231.4
× 100.
E)
241.2
241.2 – 231.4
× 100.
Skill: Level 2: Using deinitions
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
73) If the CPI decreases from one year to the next, then the inlation rate is
A) positive.
B) above 100.
C) below 100.
D) negative.
E) 0.
Skill: Level 2: Using deinitions
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
74) Suppose in year 1 the CPI is 90, in year 2 the CPI is 100, and in year 3 the CPI is 110.
Then, inlation is
A) 100 percent in year 1.
B) 11 percent between years 1 and 2.
26
C) 11 percent between years 2 and 3.
D) 10 percent between years 2 and 3.
E) Both answers B and D are correct.
Skill: Level 2: Using deinitions
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
75) A country’s CPI was 84.5 last year and 100.0 this year. The inlation rate was
A) 84.5 percent.
B) 18.3 percent.
C) 15.5 percent.
D) 7.29 percent.
E) -18 percent.
Skill: Level 2: Using deinitions
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
76) If the CPI this year is 240 and the CPI in the previous year was 200, what is the annual
inlation rate?
A) 40.0 percent
B) 20.0 percent
C) 50 percent
D) 16.7 percent.
E) -16.7 percent
Skill: Level 2: Using deinitions
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
27
77) The CPI was 170 last year and is 190 this year. What is the inlation rate between these
two years?
A) 10.5 percent
B) 20 percent
C) 11.8 percent
D) 18 percent
E) 15.0 percent
Skill: Level 2: Using deinitions
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
78) In the current year, the CPI is 122 and during the previous year the CPI was 115. The
inlation rate between these years is
A) 5.7 percent.
B) 6.1 percent.
C) -5.7 percent.
D) -6.1 percent.
E) 1.61 percent.
Skill: Level 2: Using deinitions
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
79) In the current year, the CPI is 160 and during the previous year the CPI was 181. The
inlation rate between these years is
A) 11.6 percent.
B) 13.1 percent.
C) -11.6 percent.
D) -13.1 percent
E) -013.1 percent.
Skill: Level 2: Using deinitions
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
28
80) The inlation rate between last year and this year was 14 percent. The CPI was 118 this
year. What was the CPI last year?
A) 104.0
B) 103.5
C) 104.5
D) 105.0
E) 103.0
Skill: Level 2: Using deinitions
Section: Checkpoint 7.1
Status: New
AACSB: Analytical thinking
81) If the price index last year was 100 and today it is 167, what is the inlation rate over
this period?
A) -67 percent
B) -6.7 percent
C) 33 percent
D) 67 percent
E) 167 percent
Skill: Level 1: Deinition
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
82) If the current period has a CPI of 143, then the amount of inlation since the base
period is
A) 143 percent.
B) 43 percent.
C) 57 percent.
D) 157 percent.
E) unknown without knowing the base period’s CPI.
Skill: Level 2: Using deinitions
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
29
83) Suppose a report from the Bureau of Labor Statistics states that the CPI for the year
2012 was 152. What is the percentage point increase in the prices of the goods and
services since the reference base period?
A) 152 percent
B) 52 percent
C) 100 percent
D) 48 percent
E) 252 percent
Skill: Level 2: Using deinitions
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
84) If in Switzerland in January, 2009 the CPI was 187.4 and in January, 2010 it was 191.1,
then the inlation rate in 2010 was
A) 1.9 percent.
B) 3.7 percent.
C) -1.9 percent.
D) unknown without the base period index number.
E) unknown without the real prices.
Skill: Level 2: Using deinitions
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
85) The CPI for 2012 was 121, and for 2013 it was 132. What was the inlation rate
between 2012 and 2013?
A) 9.09 percent
B) 11 percent
C) 10 percent
D) 8.3 percent
E) 121.0 percent
Skill: Level 2: Using deinitions
Section: Checkpoint 7.1
Status: Old
AACSB: Analytical thinking
30