曼昆经济学题库chapter16.docx
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曼昆经济学题库chapter16
Chapter16
MeasuringtheCostofLiving
MULTIPLECHOICE
1.BabeRuth,thefamousbaseballplayer,earned$80,000in1931.Today,thebestbaseballplayerscanearn200timesasmuchasBabeRuthin1931.However,priceshavealsorisensince1931.Wecanconcludethat
a.thebestbaseballplayerstodayareabout200timesbetteroffthanBabeRuthwasin1931.
b.becausepriceshavealsorisen,thestandardoflivingofbaseballstarshasn’tchangedsince1931.
c.onecannotmakejudgmentsaboutchangesinthestandardoflivingbasedonchangesinpricesandchangesinincomes.
d.onecannotdeterminewhetherbaseballstarstodayenjoyahigherstandardoflivingthanBabeRuthdidin1931withoutadditionalinformationregardingincreasesinpricessince1931.
ANSWER:
d.onecannotdeterminewhetherbaseballstarstodayenjoyahigherstandardoflivingthanBabeRuthdidin1931withoutadditionalinformationregardingincreasesinpricessince1931.
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2.Whentheconsumerpriceindexrises,thetypicalfamily
a.hastospendmoredollarstomaintainthesamestandardofliving.
b.canspendfewerdollarstomaintainthesamestandardofliving.
c.findsthatitsstandardoflivingisnotaffected.
d.canoffsettheeffectsofrisingpricesbysavingmore.
ANSWER:
a.hastospendmoredollarstomaintainthesamestandardofliving.
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3.Theconsumerpriceindexisusedto
a.trackchangesinthelevelofwholesalepricesintheeconomy.
b.monitorchangesinthecostofliving.
c.monitorchangesinthelevelofrealGDP.
d.trackchangesinthestockmarket.
ANSWER:
b.monitorchangesinthecostofliving.
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4.Theterm“inflation”isusedtodescribeasituationinwhich
a.theoveralllevelofpricesintheeconomyisincreasing.
b.incomesintheeconomyareincreasing.
c.stock-marketpricesarerising.
d.theeconomyisgrowingrapidly.
ANSWER:
a.theoveralllevelofpricesintheeconomyisincreasing.
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5.Whentheoveralllevelofpricesintheeconomyisincreasing,wesaythattheeconomyisexperiencing
a.economicgrowth.
b.inflation.
c.unemployment.
d.deflation.
ANSWER:
b.inflation.
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6.Theinflationrateisdefinedasthe
a.pricelevel.
b.changeinthepricelevel.
c.priceleveldividedbythepricelevelinthepreviousperiod.
d.percentagechangeinthepricelevelfromthepreviousperiod.
ANSWER:
d.thepercentagechangeinthepricelevelfromthepreviousperiod.
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7.TheCPIisameasureoftheoverallcostof
a.inputspurchasedbyatypicalproducer.
b.goodsandservicesboughtbyatypicalconsumer.
c.goodsandservicesproducedintheeconomy.
d.stocksontheNewYorkStockExchange.
ANSWER:
b.goodsandservicesboughtbyatypicalconsumer.
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8.WhichofthefollowingagenciescalculatestheCPI?
a.theNationalPriceBoard
b.theDepartmentOfWeightandMeasurements
c.theBureauofLaborStatistics
d.theCongressionalBudgetOffice
ANSWER:
c.theBureauofLaborStatistics
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9.TheCPIiscalculated
a.weekly.
b.monthly.
c.quarterly.
d.yearly.
ANSWER:
b.monthly.
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10.WhatisthebasketofgoodsusedtoconstructtheCPI?
a.arandomsampleofallgoodsandservicesproducedintheeconomy
b.thegoodsandservicestypicallyboughtbyconsumers,accordingtoBureauofLaborStatisticssurveys
c.goodsandservicesweightedbytheratioofexpendituresonthemrelativetotheconsumptioncomponentofGDP
d.theleastandthemostexpensivegoodsandservicesineachmajorcategoryofconsumerexpenditures
ANSWER:
b.thegoodsandservicestypicallyboughtbyconsumers,accordingtoBureauofLaborStatisticssurveys
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11.WhichgoodsaresupposedtobeincludedintheCPI?
a.allgoodsandservicesproducedintheeconomy
b.allgoodsandservicesthattypicalconsumersbuy
c.allgoodsandservicesintheconsumptioncomponentoftheGDPaccounts
d.allthegoods,butnottheservices,intheconsumptioncomponentoftheGDPaccounts
ANSWER:
b.allgoodsandservicesthattypicalconsumersbuy
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12.IntheCPI,goodsandservicesareweightedaccordingto
a.howmuchconsumersbuyofeachitem.
b.whetherthegoodsandservicesarenecessitiesorluxuries.
c.thelevelsofproductionofthegoodsandservicesinthedomesticeconomy.
d.bytheexpendituresonthemintheGDPnationalincomeaccounts.
ANSWER:
a.howmuchconsumersbuyofeachitem.
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13.HowaretheweightsonthevariousgoodsandservicesintheCPIbasketdetermined?
a.Allgoodsandservicesareweightedequally.
b.Asurveyisconductedtodeterminehowmuchofeachgoodandservicetypicalconsumerspurchase.
c.theweightsequaltheratioofexpendituresoneachgoodorservicedividedbythetotalconsumptionexpendituresintheGDPaccounts.
d.Eachgoodandserviceisweightedaccordingtoitsprice.
ANSWER:
b.Asurveyisconductedtodeterminehowmuchofeachgoodandservicetypicalconsumerspurchase.
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14.Thestepsinvolvedincalculatingtheconsumerpriceindexinclude,inorder:
a.chooseabaseyear,fixthebasket,computetheinflationrate,computethebasket’scost,andcomputetheindex.
b.chooseabaseyear,findtheprices,fixthebasket,computethebasket’scost,andcomputetheindex.
c.fixthebasket,findtheprices,computethebasket’scost,chooseabaseyearandcomputetheindex.
d.fixthebasket,findtheprices,computetheinflationrate,chooseabaseyearandcomputetheindex.
ANSWER:
c.fixthebasket,findtheprices,computethebasket’scost,chooseabaseyear,andcomputetheindex.
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Usethetablebelowtoanswerthefollowingtwoquestions.
year
peaches
pecans
2000
$11perbushel
$6perbushel
2001
$9perbushel
$10perbushel
15.Supposethatthetypicalconsumerbasketconsistsof10bushelsofpeachesand15bushelsofpecansandthatthebaseyearis2000.Whatistheconsumerpriceindexfor2001?
a.100
b.120
c.200
d.240
ANSWER:
b.120
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16.Whatwastheinflationratein2001?
a.20percent
b.16.7percent
c.10percent
d.8percent
ANSWER:
a.20percent
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Usethetablebelowtoanswerthefollowingtwoquestions.
year
priceofpork
priceofcorn
2003
$20
$20
2004
$20
$30
17.SupposethatthebasketofgoodsintheCPIconsistedof3unitsofporkand2unitsofcorn.Whatistheconsumerpriceindexfor2004ifthebaseyearis2003?
a.100
b.105
c.115
d.120
ANSWER:
d.120
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18.SupposethatthebasketofgoodsintheCPIconsistedof3unitsofporkand2unitsofcorn.Whatistheinflationratefor2004?
a.33.3percent
b.25percent
c.20percent
d.15percent
ANSWER:
c.20percent
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19.ThemarketbasketusedtocalculatetheCPIinAquiloniais4loavesofbread,6gallonsofmilk,2shirtsand2pants.In2001breadcost$1.00perloaf,milkcost$1.50pergallon,shirtscost$6.00eachandpantscost$10.00perpair.In2002breadcost$1.50perloaf,milkcost$2.00pergallon,shirtscost$7.00eachandpantscost$12.00perpair.Whatwastheinflationrate,asmeasuredbytheCPI,forAquiloniabetween2001and2002?
a.30percent
b.24.4percent
c.21.6percent
d.Itisimpossibletodeterminewithoutknowingthebaseyear.
ANSWER:
b.24.4percent
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Usethefollowinginformationtoanswerthenextfourquestions.
InthecountryofShem,theCPIiscalculatedusingamarketbasketconsistingof5apples,4loavesofbread,3robesand2gallonsofgasoline.Theper-unitpricesofthesegoodshavebeenasfollows:
Year
Apples
Bread
Robes
Gasoline
1999
$1.00
$2.00
$10.00
$1.00
2000
$1.00
$1.50
$9.00
$1.50
2001
$2.00
$2.00
$11.00
$2.00
2002
$3.00
$3.00
$15.00
$2.50
20.Whatwastheinflationrate,asmeasuredbytheCPI,between1999and2000?
a.–8.89percent
b.–7.14percent
c.3.75percent
d.Itisimpossibletodeterminewithoutknowingthebaseyear.
ANSWER:
a.–8.89percent
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21.Whatwastheinflationrate,asmeasuredbytheCPI,between2000and2001?
a.28.5percent
b.34.2percent
c.47percent
d.Itisimpossibletodeterminewithoutknowingthebaseyear.
ANSWER:
b.34.2percent
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22.Whatwastheinflationrate,asmeasuredbytheCPI,between2001and2002?
a.40percent
b.40.25percent
c.46.46percent
d.Itisimpossibletodeterminewithoutknowingthebaseyear.
ANSWER:
a.40percent
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23.FortheCPI,thebaseyearis
a.thebenchmarkagainstwhichotheryearsarecompared,anditchangeseachyear.
b.thebenchmarkagainstwhichotheryearsarecompared,anditchangesoccasionally.
c.theyeartheCPIfirstappeared.
d.always1989.
ANSWER:
b.thebenchmarkagainstwhichotheryearsarecompared,anditchangesoccasionally.
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24.Foranygivenyear,theCPIisthepriceofthebasketofgoodsandservicesinthe
a.givenyeardividedbythepriceofthebasketinthebaseyear,thenmultipliedby100.
b.givenyeardividedbythepriceofthebasketinthepreviousyear,thenmultip