In the Full Employment and Balanced Growth Act of 1978, price stability means that Multiple Choice O The inflation rate is the same each year. O There is zero inflation each year. O Inflation is less than 3 percent per year. O Inflation is less than 5 percent per year.Which of the following groups is protected from a sudden increase in inflation? Multiple Choice O Workers who receive fixed wages under multiyear contracts. O Fixed-income groups. O Borrowers who have loans at fixed interest rates. O People who rent their homes under short-term leases in comparison with those who own their homes.Inflation is Multiple Choice O An increase in relative prices of all goods and services. O An increase in the average level of prices of goods and services. O A rise in the price of every good but not any service. O A situation in which purchasing power increases.If the economy is producing at capacity and consumers are willing and able to buy more even more goods, this may cause Multiple Choice O Demand-pull inflation. O Supply-side inflation. O The price effect. O Cost-push inflation.The Consumer Price Index is Multiple Choice O A measure of changes in the average price of all goods and services. O A measure of changes in the average price of consumer goods and services. O Used to measure the impact of business speculation on consumers. O The impact felt by consumers who move into a higher tax bracket because of inflation.The Consumer Price Index is Multiple Choice O The impact felt by consumers who move into a higher tax bracket because of inflation. O Used to measure the impact of business speculation on consumers. O A measure of changes in the average price of all goods and services. O A measure of changes in the average price of consumer goods and services.Your real income is Multiple Choice O The purchasing power of the money you receive. O The same as your nominal income in times of high inflation. O Measured in current dollars. O The amount of money you receive during a given time period.If OPEC raises the price of oil and production costs increase, this may cause Multiple Choice O Hyperinflation. O Super-pull inflation. O Demand-pull inflation. O Cost-push inflation.A friend tells you that his income has risen every year by 5 percent. At the same time, prices, on average, have risen by 5 percent. Your friend claims he is better Your friend Multiple Choice O Is experiencing money illusion. O Has experienced an increase in real income only. O Really is better off as he suggests. O Has experienced an increase in nominal and real income.If nominal GDP is $9,600 billion and the GDP deflator is 118.5, real GDP is Multiple Choice O $10,852.7 billion. O $6,586.7 billion. O $8,101.3 billion. O $3,657.0 billion.Hyperinflation is Multiple Choice O An inflation rate in excess of 20 percent, lasting at least one year. O The movement of taxpayers to higher tax brackets because of rising prices. O An inflation rate in excess of 200 percent, lasting at least one year. O A common problem in the United States.The base period is the Multiple Choice O Time period when full employment is reached. O Absence of significant changes in the average price level. O First year in which inflation figures were calculated. O Time period used for comparative analysis.If the price of your cell phone service increases from $70 to $105 over a period of one year and your income rises from $1,500 to $1,525, your nominal income ha Multiple Choice O Increased, and your real income has increased. O Increased, but your real income has decreased. O Decreased, and your real income has decreased. O Increased, but your real income has remained the same.Real income is Multiple Choice O Nominal income adjusted for inflation. O The amount of money income received in a given time period, measured in current dollars. O The use of nominal dollars to gauge changes in income. O None of the other choices.The most desirable inflation rate is the rate that Multiple Choice O Maximizes the "wealth effect" of inflation. O Coincides with an unemployment rate of 0 percent. O Has the least effect on the behavior of companies, investors, consumers, and workers. O Equals the official goal of 3 percent.During a period of unanticipated inflation, Multiple Choice O Individuals on fixed incomes are better off. O Debtors and creditors are both better off because of lower real interest rates. O All individuals are worse off because of the level of uncertainty. O Debtors are better off and creditors are worse off.If the CPI increases from 110 to 125 for one year, the rate of inflation for that year is Multiple Choice O 1.13 percent. O 15 percent. O 13.6 percent. O 50 percent.During a period of unanticipated inflation, Multiple Choice O Debtors and creditors are both better off because of lower real interest rates. O Individuals on fixed incomes are better off. O Debtors are better off and creditors are worse off. O All individuals are worse off because of the level of uncertainty.The core inflation rate excludes Multiple Choice O Food and energy prices. O Entertainment and packaging prices. O Only energy prices for the airlines. O Import prices.The uncertainty that results from inflation causes changes in Multiple Choice O Income, but not consumption. O Saving and investment behavior, but not consumption. O Consumption, saving, and investment behavior. O Consumption, but not saving and investment behavior