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AP Macroeconomics Money and Banking — practice questions — page 4

Explore 142 free Money and Banking questions in AP Macroeconomics Economics. Open each question or exercise to read its content, reference answers and available explanation.

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Money and Banking questions and exercises with answers

Showing questions 91–120 of 142.

By definition, the base year of a price index has an index number of:Read the answer and worked solution →When a price index moves from 107 to 110, the precise inflation rate is:Read the answer and worked solution →The most commonly cited measure of US inflation is the:Read the answer and worked solution →Which agency calculates the CPI?Read the answer and worked solution →When peach prices soar and shoppers switch to other fruit, a fixed basket overstates inflation. This is:Read the answer and worked solution →Room air conditioners were widely sold in the early 1950s but entered the CPI basket only in:Read the answer and worked solution →The CPI basket is built from a survey of about how many households?Read the answer and worked solution →Which category carries the largest CPI weight, at 42.7 per cent?Read the answer and worked solution →The core inflation index excludes volatile items such as:Read the answer and worked solution →A price index based on what producers pay for supplies and inputs is the:Read the answer and worked solution →Which index covers all GDP components, including bulldozers and factory buildings?Read the answer and worked solution →A period when the buying power of money increases, as in the 1930s, is called:Read the answer and worked solution →In the Land of Funny Money, every price, wage and bank balance rose 20% overnight. The real effect was:Read the answer and worked solution →A car loan is fixed at 9% while inflation is 3%. The real interest rate is:Read the answer and worked solution →Catch the CPI categoriesRead the answer and worked solution →Pop the price indexesRead the answer and worked solution →Run the inflation numbersRead the answer and worked solution →Slice the inflation wordsRead the answer and worked solution →Hurt or helped by inflationRead the answer and worked solution →Sort measuring, losers and fixesRead the answer and worked solution →Type the numberRead the answer and worked solution →Inflation bingoRead the answer and worked solution →The Great Recession lasted from December 2007 to:Read the answer and worked solution →US unemployment peaked during the Great Recession at 10.0% in:Read the answer and worked solution →Unemployment rises months after a recession begins and falls months after it ends, so it is a:Read the answer and worked solution →An economy with high unemployment is compared to a company with a:Read the answer and worked solution →A retired person without a job is counted as:Read the answer and worked solution →To be counted as unemployed, a person must have actively looked for work in the previous:Read the answer and worked solution →The labor force equals:Read the answer and worked solution →The unemployment rate is unemployed people divided by:Read the answer and worked solution →

Worked practice questions

By definition, the base year of a price index has an index number of:

  1. 107
  2. 200
  3. 100
  4. 110
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Correct answer: C. 100

1. Divide every year's spending by the base year's. 2. The base year is set to 100. 3. Index numbers have no units. _Source: OpenStax Principles of Macroeconomics for AP Courses 2e, Chapter 8, Inflation (CC BY 4.0)._

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When a price index moves from 107 to 110, the precise inflation rate is:

  1. 3.0%
  2. 3.3%
  3. 1.7%
  4. 2.8%
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Correct answer: D. 2.8%

1. Do not just subtract the index numbers. 2. 3 divided by 107 is 0.028. 3. That is 2.8 percent. _Source: OpenStax Principles of Macroeconomics for AP Courses 2e, Chapter 8, Inflation (CC BY 4.0)._

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The most commonly cited measure of US inflation is the:

  1. Consumer Price Index
  2. Producer Price Index
  3. GDP deflator index
  4. Employment Cost Index
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Correct answer: A. Consumer Price Index

1. It tracks a fixed basket for a family of four. 2. The CPI is most cited. 3. It is also called the cost-of-living index. _Source: OpenStax Principles of Macroeconomics for AP Courses 2e, Chapter 8, Inflation (CC BY 4.0)._

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