When statisticians fail to take into account improvements in the quality of goods and services, the CPI will tend to ________ the rate of inflation.
A. overstate
B. be unrelated to
C. precisely measure
D. understate
Answer: A
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Which of the following is TRUE regarding money market mutual funds?
I. Money market mutual funds buy highly liquid assets like Treasury bills. II. Shareholders can obtain loans from money market mutual funds. A) I only B) II only C) both I and II D) neither I nor II
In the Village of Punjab, Sheryl owns a well, which is the only source of drinking water. The supply of water is perfectly inelastic at a quantity of 1,000 gallons of water per day
At a price of $2.00 per gallon, the quantity demanded per day is 1,000 gallons. The government imposes a $0.50 per gallon tax. a) After the tax is imposed, what is the price paid by the villagers? What is the price received by Sheryl? b) How much revenue does the government collect? c) What fraction of the tax does Sheryl pay? What fraction is paid by the villagers?
Which of the following is not a Eurocurrency claim?
A) A U.S.-dollar deposit by a London firm in a Cleveland bank B) A sterling deposit by a London firm in a New York bank C) A U.S.-dollar deposit by a London firm in a London bank D) A Yen deposit by a New York firm in a London bank
The effect of monetary policy is greatest
A. If the money demand curve is elastic. B. In the liquidity trap. C. When investment demand becomes more responsive to changes in the interest rate. D. If lenders and borrowers have low expectations about the economy.