CPI and Inflation

face year

trace year

base year

index value

True

False

Sometimes

All of the time

differ

increase

decrease

change

percentage

average

price

ratio

fall

fluctuate

remain the same

rise

falling

fluctuating

increasing

remain the same

Borrowers gain at the expense of lender

Inflation and the money supply

It affects the distribution of income

It affects the balance of payment

a price deflator

the GDP deflator

the consumer price index

all of the above

the cost of buying a fixed basket of goods and services, and calculating how this cost changes from year to year

the cost of buying a basket of goods and services, which changes from year to year depending on the price level

the cost of buying a basket of goods and services, which changes from year to year depending on consumer tastes and preferences

all of the above, depending on what the CPI is trying to measure

menu cost

inflationary cost

bank runs cost

shoe-leather cost

True

False

Yes, because it can be harmful to the economy

No, it reduces price level and increases the purchasing power of the people