Most economists believe that the CPI

a. accurately measures the inflation rate
b. accurately measures the inflation rate except during years when there are major economic shocks like the Arab oil embargo
c. slightly underestimates the inflation rate
d. seriously underestimates the inflation rate
e. overstates the inflation rate


E

Economics

You might also like to view...

Scientists have said for years cod was so seriously overfished in European Union waters that there was a risk of extinction due to stock collapse

"To ensure this recovery… Ministers agreed a 10 percent cut in days at sea (for North Sea cod)," EU Fisheries Commissioner Joe Borg stated in 2008. What is the goal of this policy? A) To reduce the number of fishing days to the point where marginal cost per day equals marginal benefit B) To reduce the number of fishing days to the point where marginal social cost per day equals marginal benefit C) To reduce the number of fishing days to the point where marginal social benefit per day equals marginal benefit D) To reduce the number of fishing days to the point where marginal social cost per day equals marginal social benefit

Economics

How were countries whose industries competed with Chinese industry affected by a yuan that was pegged to the dollar?

A) Because the yuan was undervalued at the pegged exchange rate, the level of Chinese exports remained higher than they would have been if the exchange rate was allowed to float freely. B) Competitors feared that the declining value of the dollar would continue to make Chinese goods more expensive. C) Because the yuan was overvalued at the pegged exchange rate, competing firms from other countries feared that abandoning the peg would lead to an increase in Chinese exports. D) Because China's population is so large relative to other countries, the pegged exchange rate made the goods of foreign competing firms much less expensive than domestic Chinese goods.

Economics

Which of the following is a symptom of a price floor?

a. scalping of Super Bowl tickets b. surplus cheese c. the New York city housing shortage d. black markets e. milk shortages

Economics

Under a flexible exchange rate system, one factor that does NOT directly affect rates of exchange is

A) changes in the inflation rate in each country.
B) changes in productivity in each country.
C) changes in gold holdings in each country.
D) changes in economic stability in each country.

Economics