Check your progress

Reading A

1. Write no more than three words or a number for each answer.

1) What index is used to measure changes in the cost of living?

________________________________________________

2) What is considered in the first stage of index construction?

________________________________________________

3) What weighted average is being studied during the second stage of construction?

________________________________________________

4) Which index shows the weighted average of the quantity of produced goods?

________________________________________________

1. Do the following statements agree with the information given in Reading A?

Use TRUE if the statement agrees with the information

FALSE if the statement contradicts the information

NOT GIVEN if there is no information on this

1. RPI is an index of prices of goods purchased by all households.
2. The comparison of annual increase of RPI defines the inflation rate.
3. Commodity groupings are confined only to English economy.
4. The distinction between nominal and real values is of great importance in predicting further economic development.

1. Fill in the missing words to complete the table: you can check your answers in a dictionary.

1. Make up words combinations with adjectives from the table above.

Example: purchasing power of money, comparative analysis

Reading B

1. There are six paragraphs in the text. Which paragraph tells us about:

1) The way to calculate the index of weekly wage rates.

2) The definition of nominal earnings.

3) The real state of things with the wages up to 1983.

4) The importance of distinction between real and nominal values for economists.

5) What Table 2-3 illustrates.

6) The behavior of RPI between 1971-83.

2. Do the following statements agree with the information given in the text?

Use TRUE if the statement agrees with the information

FALSE if the statement contradicts the information

NOT GIVEN if there is no information on this

1) Table 2-7 shows the index of managers´ earnings in the UK between 1971-1983.

2) The table tells us that during the period of 1971-1983 the population in Great Britain became better-off.

3) Manual workers´ income increased faster during this period than managers´ income.

4) During the period of 1971-83 nominal earnings of manual workers increased a little bit less than four times.

5) Nominal earnings measure the amount of goods and services that can be purchased be a representative worker.

6) The rise in wages during this period could not catch up with the growth of prices.

3. Complete the definition of nominal variable using the list of words, A-F, below:

A -production, B -money, C -contrasted, D -measured, E -levels, F -data

Nominal variable.

Nominal variable is an economic variable measured in (1______________________) terms. Examples include nominal income (2____________________), and price and wage (3____________________). Nominal variables are (4_____________________) with real variables, which are (5____________________) in physical units, such as employment or steel (6____________________), and variables which are pure numbers, such as elasticities and percentage shares.