Question 1
Related to the
Economics in Practice on p. 453: If a retiree's pension is tied to the CPI, her monthly pension check would tend to grow ________ if the pension is tied to the ________ CPI.
◦ slower; fixed-weight
◦ slower; chain-linked
◦ faster; chain-linked
◦ The check would grow at the same rate regardless of the type of CPI to which it is tied.
Question 2
In which of the following conditions is the inflation rate likely to rise and the unemployment rate likely to fall?
◦ hyperinflation
◦ recession
◦ boom
◦ stagflation