43) A decrease in the overall price level is known as A) recession. C) deflation. 44) Rapid increases in the price level during periods of recession or high unemployment are known as A) stagnation. B) inflation. C) depression. D) stagflation. B) economic growth. D) inflation, 45) A period of very rapid increase in the overall price level is known as B) stagflation. A) depression. C) stagnation. 46) A price index is A) a sustained increase in the overall price level. B) a measurement showing how the average price of a bundle of goods changes over time. C) a measurement showing the cost of a bundle of goods at a point in time. D) a decrease in the overall price level. 47) If the CPI in period 1 is 125 and the CPI in period 2 is 150, then the rate of inflation between period 1 and period 2 is A) 20%. B) 25%. D) 50%. C) 30%. D) hyperinflation. 48) If Mr. Garrison is paid an interest rate of 4% on his savings, but the inflation rate is 7%, the real interest rate Mr. Garrison carns is A) 28%. B) 4%. C) -3%. D) -7%. 49) Dean borrows $400 from Tim. Tim wants to make a 10% real return on his money, so they both agree on a 10% interest rate paid next year. Dean and Tim did not anticipate any inflation, yet the actual inflation turned out to be 4% next year. In this case A) Tim is better off. B) Dean is better off. C) Tim will receive more than 10% of real rate of return a year from now. D) Dean will pay $56 a year from now on. 50) We can safely say that total output can increase if there is a(n) A) decrease in the number of workers per machine. 6 B) decrease in the size of capital and an increase in the productivity of machines. C) increase in the size of the labor force and a decrease in the productivity of workers. D) increase in the number of machines per worker. 43) 44) 4.5) 46) 47) 48) 49) 50)