F. Homeowners who purchase a home and have a 30-year adjustable rate mortgage hurt 2. An increase in the CPI from 200 to 225 would indicate an annual rate of measured inflation of a. 1.3% b. 12.5% c. 25% d. 200% e. 225% 3. The price index for the current year is 180. This means that, on average, prices in the current year are a. $0.80 higher than prices in the base year. b. $1.80 higher than prices in the base year. c. 80 percent of prices in the base year. d. 180% higher than base year prices e. 80% higher than base year prices 4. Inflation benefits people who a. lend at fixed interest rates. b. receive fixed incomes. c. save at fixed interest rates. d. borrow at fixed interest rates e. borrow at variable interest rates 5. The real interest rate equals a. the nominal interest rate plus the rate of expected inflation. b. the nominal interest rate divided by the rate of expected inflation. . the rate of expected inflation minus the nominal interest rate. d. the nominal interest rate minus the rate of unexpected inflation. e. the nominal interest rate minus the rate of expected inflation 6. If prices rose by 3% and nominal output rose by 5%, real output: a. Rose by 2%. b. Rose by 8% c. Fell by 2% d. Fell by 8% 7. In 2000 the nominal rate of interest was 7 percent. The rate of inflation was 2.7 percent. The real rate of interest was: a. 9.7 percent. b. 7 percent. c. 4.3 percent d. 2.7 percent option command command option