This year's price index is 110 and was 100last year. This year pens cost $6.25 a box and cost $6 last year. The price of a box of pens:

increased

remained steady

decreased

more info needed

1. Your parents move to a town in Florida where houses cost half as much, your brother's company moves him and his job to New Hampshire, your sister takes a big job in NYC while you stay put. Arguing that your _ is better off is making the error called the money illusion.
2. parents
3. brother
4. self
5. sister
6. In the price indices, an item's weight refers to its:
7. heaviness in pounds
8. % of budget
9. grouping (4-pack, dozen etc.)
10. use in years

Both cost-push and demand-pull inflation accelerate prices but the key distinction is that:

cost-push accelerates prices faster:

demand-pull provides more output whereas cost-push less

demand-pull lasts longer

demand-pull is easier to correct

1. In the US, deflation roughly happens:
2. monthly
3. quarterly
4. yearly
5. every decade
6. each generation
7. Your sister was stationed on an NATO air force base in Spain. She kept a local savings account paying 1% while prices fell by 1%. Her real gain was _ %.
8. -1
9. 0
10. 1
11. 2
12. 3

QUESTION 20

1. It is argued that some inflation is expected because products are becoming
2. privileged
3. scarce
4. better
5. costlier