In econland, a college graduate in 1989 found a job paying $48,000 per year. The Econland CPI was 160 in 1989. A college graduate in 2003 found a job paying $60,000 per year. The CPI was 200 in 2003. The 2003 graduate's job paid ____ in nominal terms and ____ in real terms. (More,more; more,less; less,more; less,less; more, the same)

During "disinflation" the inflation rate is rising. (True or false)

Deflating is the process of dividing a real quantity by a price index to express the quantity in terms of purchasing power (true or false)

One family earned an income of $40,000 in 1995. Over the next year, their dollar income increased to $44,000 while CPI increased by 12%. Over that next year, this family's nominal income ____ and the family's real income ____. (Increased, did not change; increased, increased; increased, decreased; decreased, increased; decreased decreased)

Shoe leather costs refer to the costs of economizing on cash, including more frequent trips to the bank, new cash management systems and increased employment bank costs, while the inflation rate increases (true or false)

The nominal interest rate measures a percentage increase in dollar value while the real interest rate measures a percentage increase in purchasing power

The substitution bias in the CPI includes the failure of statsticians to (take into account totally new goods purchased by consumers substituting for old goods, allow for the possibility that consumers switch to lower quality stores at lower prices when they shop, take into account improvements as a result of human capital increases and the resulting ability to produce goods at lower cost by substituting skilled labor for unskilled labor, allow for the possibility that consumers switch away from products whose prices are rising, take into account the changing quality of life all consumers face)