The measure of the cost of a standard basket of goods and services in any period relative to the cost of the same basket of goods and services in the base year is called the:
A. consumer price index.
B. consumption production index.
C. consumer production index.
D. consumption cost calculator.
Answer: A
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In an open-market sale the Federal Reserve ________ government bonds and the supply of bank reserves ________.
A. buys; increases B. sells; decreases C. sells; increases D. buys; decreases
Use the following figure showing the domestic demand and supply curves for product B in a hypothetical economy to answer the next question.
After trade, at a world price of Pw, the net loss of producer surplus equals area(s)
A. B + C. B. D. C. E + F. D. B + C + E + F.
The consumption function will shift with
A) a decrease in real disposable income. B) a change in saving. C) a change in household wealth. D) an increase in real disposable income.
George Herman (Babe) Ruth was a superb baseball player, both an excellent pitcher and a record-breaking batter
Other members of the New York Yankee team, who were not as competent pitchers as Ruth, nonetheless had a comparative advantage over Ruth in pitching because A) Ruth was such a competent batter. B) the owners of the Yankees were more interested in monetary profits than in winning baseball games. C) the price system failed to provide adequate information and incentive. D) they were allowed to pitch more often and practice increased their productivity. E) too many players preferred batting to pitching.