Inflation (Listening)

1) What is the lecture mainly about?

A) The meaning of inflation.
B) The goods and services used by the average household.
C) The influence of the CPI on inflation calculations.
D) The way to calculate inflation.


2) Which of the following is true of the Consumer Price Index?

A) It is used to calculate average spending on luxury items.
B) It allows the government to monitor price increases.
C) It would cost approximately $100.
D) It is a measurement of average consumer income.


3) At 1:17, the lecturer says, "And let's say that in year one, that it costs them a hundred dollars - the actual basket CPI constructs would not cost a hundred dollars, but I am going to do this for the sake of simplicity."

What does the lecturer mean when he says, "but I am going to do this for the sake of simplicity"?

A) He thinks that students will not understand the actual data used by the CPI.
B) He doesn't have the real data available at the moment.
C) He is stating that the real costs would be much higher than $100.
D) He wants to make the math as easy as possible so students understand the process.


4) Why does the speaker mention the "money supply"?

A) He is discussing the distinction between two definitions of inflation.
B) He is explaining why inflation occurred in his diagram.
C) He is clarifying the government's role in the economy.
D) He is introducing a second main topic for this discussion.


5) What can be inferred about the speaker's explanation?

A) It is not entirely correct.
B) The calculation is much less complicated in the real world.
C) There are many other factors that real economists consider.
D) It is too basic to be useful for the average person.