The Economics of Money, Banking and Financial Markets 13th Global Edition Test bank

 
18) If the aggregate price level at time t is denoted by Pt, the inflation rate from time t - 1 to t is defined as
A) πt = (Pt - Pt - 1)/Pt - 1.
B) πt = (Pt + 1 - Pt - 1)/Pt - 1.
C) πt = (Pt + 1 - Pt )/Pt.
D) πt = (Pt - Pt - 1)/Pt.
Answer:  A
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 

 
19) If the price level increases from 200 in year 1 to 220 in year 2, the rate of inflation from year 1 to year 2 is
A) 20%.
B) 10%.
C) 11%.
D) 120%.
Answer:  B
Question Status:  Previous Edition
AACSB:  Analytical Thinking
 
20) If the CPI is 120 in 1996 and 180 in 2002, then between 1996 and 2002, prices have increased by
A) 180%.
B) 80%.
C) 60%.
D) 50%.
Answer:  D
Question Status:  Previous Edition
AACSB:  Analytical Thinking
 
21) If the CPI in 2004 is 200, and in 2005 the CPI is 180, the rate of inflation from 2004 to 2005 is
A) 20%.
B) 10%.
C) 0%.
D) -10%.
Answer:  D
Question Status:  Previous Edition
AACSB:  Analytical Thinking