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[solution]: 10. "As best we can tell, responded the central bank governor,


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10. "As best we can tell, responded the central bank governor, the center of the 2 percent inflation target, namely 1 percent, appears to correspond to genuine price stability once the various sources of bias in the CPI are allowed for." An example of bias in the CPI measure is that it

a) ignores import prices b) ignores investment goods

c) ignores most quality changes d) values government output at cost

"The Commerce department announced that it is shifting from 1987 to 1992 as the base year for calculating the nation's real GDP and price index."

11. In the new official figures, compared to the old official figures, the 1987 number for real GDP is

a) smaller b) unchanged c) larger d) not enough information to tell

12. In the new official figures, compared to the old official figures, the 1987 number for nominal GDP is

a) smaller b) unchanged c) larger d) not enough information to tell

 


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