A price index:
A. summarizes the changes in the cost of living for only rural consumers.
B. measures how much the cost of a market basket has risen or fallen relative to the cost in a base time period.
C. is generally only used with consumer goods and services
D. allows us to see clearly the changes in the cost of a market basket daily.
Answer: B
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Keynesian theory emphasizes
A) aggregate supply. B) rational expectations. C) short-run analysis. D) Say's Law.
In economic theory, an unemployment rate of _________ considered desirable
a. 5 percent or less b. 9 to 10 percent c. Under 12 percent d. 18 percent
Compared to the case in which a monopoly insurer offers the consumer a contract, if insurance is competitively provided:
a. any moral hazard or adverse-selection problem is alleviated. b. any moral hazard or adverse-selection problem is worsened. c. the essence of any moral hazard or adverse-selection problem would not change much. d. insurers would no longer offer menus of contracts.
The way we know what commodities are relatively scarce or abundant is through
A) transaction costs. B) prices. C) price ceilings. D) price floors.