Budget A consists mostly of food, health care and an apartment and Budget B is made up largely of Food, Entertainment, and Travel. If inflation is estimated by the consumer price index which includes all the items listed above and travel and healthcare had the biggest jump in prices, which of the following is true?
A. Budget A will likely have a less accurate estimate than budget B
B. There should be no bias in this case because of the simple budget components
C. Budget B will likely have a less accurate measurement than budget A
D. Inflation will be equally biased for both budgets
Answer: C
You might also like to view...
Worker mobility and transition aid to workers are two ways to offset some of the impacts of:
A. increasing wage inequality. B. increases in the labor supply. C. the slowdown in productivity growth. D. the slowdown in real-wage growth.
The presence of pollution in the dry cleaning industry leads in the long run to dynamic inefficiencies because
A) people will buy fewer clothes that need dry cleaning than they otherwise would have. B) people will develop substitutes for dry cleaning that are wasteful. C) firms will be induced to leave the industry because of artificially high costs. D) firms whose average private cost is less than price will stay in (or enter) the dry cleaning industry even though their average social cost exceeds price. E) firms whose average private cost exceeds the price will exit (or fail to enter) the dry cleaning industry even though their average social cost is less than price.
Rivalry among firms would tend to be high if
a. Customers are locked into the competitors technology b. Customers can easily switch between competitor's technologies c. All of the above d. None of the above
If the exchange rate between euros and dollars were 2 euros per dollar, when a French tourist buys a good valued at $80, its cost in euros would be: a. 160 euros. b. 80 euros
c. 78 euros. d. 40 euros.