If all prices in the economy go up from one year to the next, the CPI index, using the previous year as the base would
A. be less than 100.
B. be greater than 100.
C. not be influenced since quantities have remained unchanged.
D. not be determined since enough information is given.
Answer: B
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Referring to Table 12.2, if the nominal interest rate is 3.5 percent and there is no inflation, which investments will be undertaken?
A) B, D, E B) D, E C) B, C, D, E D) C, E
If the interest rate is 8 percent, the present value of $10,000 to be received 10 years from today is about
A) $21,589. B) $9,259. C) $4,632. D) $10,800.
To the stockholder, corporate stock represents
A) a source of fixed interest income. B) a loan. C) ownership. D) a guaranteed return of principal.
What is true of stock exchanges in the United States?
A. There are two major stock exchanges in New York, several smaller regional exchanges across the nation, and over-the-counter trading via NASDAQ. B. The New York Stock Exchange is the only stock exchange in the United States. C. There are only two stock exchanges, NYSE and AMEX. D. There are only three stock exchanges, NYSE, AMEX, and NASDAQ.