The market basket cost $300 in 2020, while it cost $250 in the base year. Therefore, the price index for 2020 is
A. 120.
B. 80.
C. 83.
D. cannot be calculated because the inflation rate is not given.
Answer: A
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The Eyes Wide Open Company is considering producing binoculars that can be used to directly view the sun during a solar eclipse, but it knows that some customers could potentially go blind when using the product. The Eyes Wide Open Company
A) should definitely not produce these binoculars. B) has no way to include the value of the potential damage to eyesight in its cost-benefit analysis. C) has little choice but to include the value of the potential damage to eyesight in its cost-benefit analysis. D) must redesign the binoculars so there is absolutely no possibility of damaged eyesight to customers.
When will a decrease in aggregate demand not result in a lower inflation rate in the short run?
What will be an ideal response?
Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. A bundle of goods that Country B could potentially make would be:
A. (400 iPods, 2,000 tablets). B. (200 iPods, 1,500 tablets). C. (300 iPods, 450 tablets). D. (400 iPods, 1 tablet).
All of the following impact the effectiveness of Fed policy except
A. Expectations about the economy in the future. B. Trade Unions. C. Global sources of money. D. The time lag between when interest rates change and when investment changes.