APSC 221 Midterm 2 Question and answers 100% correct 2024/2025
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Course
APSC 221
Institution
APSC 221
APSC 221 Midterm 2 Question and answers 100% correct 2024/2025 APSC 221 Midterm 2 - Inflation
Inflation Rate - correct answer The rate of increase in averages prices of goods and services over a given time period.
Basket - correct answer The goods and services most people use.
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APSC 221 Midterm 2 - Inflation
Inflation Rate - correct answer ✔The rate of increase in averages prices of
goods and services over a given time period.
Basket - correct answer ✔The goods and services most people use.
Consumer Price Index (CPI) - correct answer ✔Indicates the number of
dollars needed in that year to buy the basket of goods that cost the amount it
had cost in the base year.
What To Do If Expected Inflation is High - correct answer ✔Low rates can be
safely ignored, but if rates are high, you must include it in detailed economic
calculations.
How to Account for Price Changes - correct answer ✔Measuring the cash
flows of a project in real dollars.
Real Dollars - correct answer ✔Monetary units of constant purchasing
power.
Current / Actual Dollars - correct answer ✔Monetary units at the time cash
flows occur.
Real Dollars to Current Dollars Conversion - correct answer ✔Rn = Cn / (1 +
f)^n where f is the inflation rate per year and n is the number of years.
Purchasing Power of the Earnings from An Investment - correct answer
✔Depends on the Real Dollar value of earnings
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