GDP excludes expenditures for

In the CPI, goods and services are weighted according to: how much consumers buy of each good or service.Social Security payments are indexed for inflation using:the CPI.For any given year, the CPI is the price of the basket of goods and services in the: given year divided by the price of the basket in the base year, then multiplied by 100.The inflation rate is calculated: by determining the percentage increase in the price index from the preceding period.Which of the following changes in the price index produces the greatest rate of inflation: 106 to 112, 112 to 118, 118 to 124, or 124 to 130.Suppose that in 2010, the producer price index increases by 2 percent. As a result, economists most likely will predict that: the consumer price index will increase in the future.One of the widely acknowledged problems with using the consumer price index as a measure of the cost of living is that the CPI: fails to account for the introduction of new goods.When the quality of a good improves while its price remains the same, the purchasing power of the dollar: increases, so theCPI overstates the change in the cost of living if the quality change is not accounted for.An important difference between the GDP deflator and the consumer price index is that: the GDP deflator reflects the prices of all final goods and services produced domestically, whereas the consumer price index reflects the prices of goods and services bought by consumers.Which of the following statements is correct about the relationship between the nominal interest rate and the real interest rate? The real interest rate is the nominal interest rate minus the rate of inflation.

Suppose that over the past year, the real interest rate was 5 percent and the inflation rate was 3 percent. It follows that:the dollar value of savings increased at 8 percent, and the purchasing power of savings increased at 5 percent.The percentage change in the price index from the preceding period:Inflation RateThe interest rate as usually reported without a correction for the effects of inflation: Nominal Interest RateThe nominal interest rate tells you: how fast the number of dollars in your bank account rises over time.A measure of the overall cost of the goods and services thought by a typical consumer: Consumer Price Index (CPI)The interest rate corrected for the effects of inflation: Real Interest RateThe real interest rate tells you: how fast the purchasing power of your bank account rises over time.A measure of the cost of a basket of goods and services bought by firmsThe automatic correction by law or contract of a dollar amount for the effects of inflationWhen looking at a graph of nominal and real interest rates you notice the graph for nominal rates and the graph for real rates cross each other many times. From this you conclude:consumer prices sometimes rose and sometimes fell in the timeframe represented on the graph.When looking at a graph of nominal and real interest rates you notice that nominal rates always lie above real rates. From this you conclude: consumer prices were always rising in the time frame represented on the graph.As long as prices are rising over time, then: the nominal interest rate exceeds the real interest ra

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