I the Concept of Real Income Is Sometimes Called Deflated

question 59

Multiple Choice

i. The concept of real income is sometimes called deflated income or income expressed in constant dollars and the CPI is called the deflator. ii. To deflate sales, the actual sales are multiplied by the wholesale price index and the result multiplied by 100.
iii. The CPI serves only one major function: as an economic indicator of the rate of inflation.

• A) (i) is a correct statement, but (ii) and (iii) are statements.
• B) (i) and (ii) are correct statements but not (iii).
• C) (i) and (iii) are correct statements but not (ii).
• D) (ii) and (iii) are correct statements but not (i).
• E) (i), (ii), and (iii) are all false statements.

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Definitions:

Compound Interest

Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan.

Truth in Lending Act

A U.S. federal law designed to promote informed use of consumer credit by requiring disclosures about its terms and costs.

Truth in Savings Act

A federal law designed to promote fairness and transparency in the savings account practices of banks and other financial institutions.

Farmland

Agricultural land used primarily for the purpose of growing crops and, sometimes, raising livestock.