CPI and Demographics

Description: This quiz will test your knowledge on the relationship between CPI and demographics.
Number of Questions: 15
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Tags: cpi demographics inflation
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Which demographic group is most affected by changes in CPI?

  1. Elderly

  2. Children

  3. Middle-aged adults

  4. Young adults


Correct Option: A
Explanation:

The elderly are most affected by changes in CPI because they are more likely to be on fixed incomes and have less flexibility in their spending.

How does CPI affect the purchasing power of consumers?

  1. It increases the purchasing power of consumers.

  2. It decreases the purchasing power of consumers.

  3. It has no effect on the purchasing power of consumers.

  4. It depends on the individual consumer.


Correct Option: B
Explanation:

CPI measures the change in the price of goods and services over time. When CPI increases, the purchasing power of consumers decreases because they can buy less with the same amount of money.

Which demographic group is most likely to experience deflation?

  1. High-income earners

  2. Low-income earners

  3. Middle-income earners

  4. All demographic groups are equally likely to experience deflation.


Correct Option: A
Explanation:

High-income earners are more likely to experience deflation because they are more likely to purchase goods and services that are subject to price decreases.

How does CPI affect the demand for goods and services?

  1. It increases the demand for goods and services.

  2. It decreases the demand for goods and services.

  3. It has no effect on the demand for goods and services.

  4. It depends on the individual good or service.


Correct Option: B
Explanation:

When CPI increases, the demand for goods and services decreases because consumers have less money to spend.

Which demographic group is most likely to experience inflation?

  1. High-income earners

  2. Low-income earners

  3. Middle-income earners

  4. All demographic groups are equally likely to experience inflation.


Correct Option: B
Explanation:

Low-income earners are more likely to experience inflation because they are more likely to purchase goods and services that are subject to price increases.

How does CPI affect the cost of living?

  1. It increases the cost of living.

  2. It decreases the cost of living.

  3. It has no effect on the cost of living.

  4. It depends on the individual consumer.


Correct Option: A
Explanation:

CPI measures the change in the price of goods and services over time. When CPI increases, the cost of living increases because consumers have to pay more for the same goods and services.

Which demographic group is most likely to be affected by changes in the CPI for food?

  1. Elderly

  2. Children

  3. Middle-aged adults

  4. Young adults


Correct Option: B
Explanation:

Children are most likely to be affected by changes in the CPI for food because they are more likely to consume food that is subject to price fluctuations.

How does CPI affect the value of savings?

  1. It increases the value of savings.

  2. It decreases the value of savings.

  3. It has no effect on the value of savings.

  4. It depends on the individual saver.


Correct Option: B
Explanation:

When CPI increases, the value of savings decreases because the same amount of money can buy less goods and services.

Which demographic group is most likely to be affected by changes in the CPI for housing?

  1. Elderly

  2. Children

  3. Middle-aged adults

  4. Young adults


Correct Option: C
Explanation:

Middle-aged adults are most likely to be affected by changes in the CPI for housing because they are more likely to own homes and pay mortgages.

How does CPI affect the rate of inflation?

  1. It increases the rate of inflation.

  2. It decreases the rate of inflation.

  3. It has no effect on the rate of inflation.

  4. It depends on the individual good or service.


Correct Option: A
Explanation:

CPI is a measure of the rate of inflation. When CPI increases, the rate of inflation increases.

Which demographic group is most likely to be affected by changes in the CPI for transportation?

  1. Elderly

  2. Children

  3. Middle-aged adults

  4. Young adults


Correct Option: D
Explanation:

Young adults are most likely to be affected by changes in the CPI for transportation because they are more likely to use public transportation and drive cars.

How does CPI affect the unemployment rate?

  1. It increases the unemployment rate.

  2. It decreases the unemployment rate.

  3. It has no effect on the unemployment rate.

  4. It depends on the individual economy.


Correct Option: A
Explanation:

When CPI increases, the unemployment rate increases because businesses are less likely to hire new workers when the cost of living is high.

Which demographic group is most likely to be affected by changes in the CPI for healthcare?

  1. Elderly

  2. Children

  3. Middle-aged adults

  4. Young adults


Correct Option: A
Explanation:

Elderly are most likely to be affected by changes in the CPI for healthcare because they are more likely to use healthcare services.

How does CPI affect the GDP?

  1. It increases the GDP.

  2. It decreases the GDP.

  3. It has no effect on the GDP.

  4. It depends on the individual economy.


Correct Option: B
Explanation:

When CPI increases, the GDP decreases because consumers have less money to spend on goods and services.

Which demographic group is most likely to be affected by changes in the CPI for education?

  1. Elderly

  2. Children

  3. Middle-aged adults

  4. Young adults


Correct Option: D
Explanation:

Young adults are most likely to be affected by changes in the CPI for education because they are more likely to be enrolled in school.

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