Economics Readings Site By Colin Ong

This blog has been created to provide an area for economics students to read about how economics impacts daily life. It is especially useful for students to understand the application of macroeconomics as communicated through the media and governmental websites.

This online resource has been set up for educational purposes.All rights are reserved by the various websites.

For further clarification, please email colin@mrmc.com.sg

MCQ 27

If the CPI rises at 5 percent per year, then every individual in the country needs exactly a 5 percent increase in their income for their standard of living to remain constant.


 

In 1989, the CPI was 124.0. In 1990, it was 130.7. What was the rate of inflation over this period?
a.
5.4 percent
b.
30.7 percent
c.
You can't tell without knowing the base year.
d.
5.1 percent
e.
6.7 percent


ANSWER: 

A

ANSWER: 

F
If your wage rises from €500 per week to €625 per week while the CPI rises from 112 to 121, you should feel an increase in your standard of living.


ANSWER: 

T
The "basket" on which the CPI is based is composed of
a.
consumer production.
b.
products purchased by the typical consumer.
c.
raw materials purchased by firms.
d.
total current production.
e.
none of these answers.


ANSWER: 

B