Inflation occurs when

the prices of some goods rise and prices of some goods fall, but more goods have price increases than decreases.

the prices of some goods rise and prices of some goods fall, but fewer goods have price increases than decreases.

the overall level of prices rises.

all prices in the economy fall.

all the prices in real estate increase.

Question 12

The____________ measures price changes in goods and services purchasedout of pocket by urban consumers, whereas the ____________ measure price changes in goods and services purchased by consumers, businesses, government, and foreigners, but not importers.

Group of answer choices

Consumer Price Index; GDP Deflator

Inflation; Deflation

GDP; Inflation

Producer Price Index; GDP Deflator

GDP Inflator; GDP Deflator

GDP Deflator; Consumer Price Index

Question 13

If the consumer price index changes from 130 to 116 in a particular year, the economy has experienced:

inflation of 10.77 percent.

deflation of 14 percent.

deflation of 10.77 percent.

deflation of 12.07 percent.

inflation of 14 percent.

Question 14

The following table includes a hypothetical market basket for a typical urban consumer for two years. Use 2018 as the reference base year.

Good	Quantity	2018 Price	2019 Price
Bagels	100	$1.00	$1.50
Shoes	5	$45.00	$50.00
DVDs	20	$10.00	$12.00

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What is the value of the CPI for 2019?

Round to the nearest hundredths (two places to the right of the decimal point).

Question 15

This table is the same table from Question 14.

The following table includes a hypothetical market basket for a typical urban consumer for two years. Use 2018 as the reference base year.

Good	Quantity	2018 Price	2019 Price
Bagels	100	$1.00	$1.50
Shoes	5	$45.00	$50.00
DVDs	20	$10.00	$12.00

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What is the rate of inflation?

Round to the nearest hundredths (two places to the right of the decimal point).

Note:Although your answer will include a percent sign, it must be excluded when entering a numerical response. According to Canvas, "only numerical values are accepted."

Question 16

Demand-pull inflation occurs when aggregate demandfor goods and services in an economy decreases while aggregate supply remains constant.

Group of answer choices

TRUE

FALSE

Question 17

The rising energy prices in the 1970s caused the cost of producing and transporting goods to rise. Higher production costs led to a change in the aggregate supply leading to an increase in the overall price level. This is an example of __________________________.

Source:Federal Reserve Bank of San Francisco

Deflation

The Law of Demand

Inflation caused by monetary policy.

Cost-push inflation

Demand-pull inflation

Question 18

The Consumer Price Indexes for January and February 2021 are given below:

January 2021:261.582

February 2021:263.014

Source:Bureau of Labor Statistics - CPI for February 2021(Links to an external site.)

Use January 2021 as the reference base year.

1. Compute the rate of inflation between January and February 2021._____________

2. How do you interpret this rate of inflation?_________________________________________________________________

1.43%; from January 2021 to February 2021, the price level increased by 1.43%.

0.55%; from January 2021 to February 2021, the price level increased by 0.55%.

-0.55%; from January 2021 to February 2021, the price level decreased by 0.55%.

0%; there was no inflation between January and February 2021.

-1.43%; from January 2021 to February 2021, the price level decreased by 1.43%.