Which of the following is true of the chained consumer price index?
a. It will generally result in a slightly lower figure for the measured annual rate of inflation than the regular consumer price index.
b. It makes no allowance for shifts away from goods and services as they become more expensive.
c. It considers only changes in the prices of household necessities such as food and clothing.
d. It holds the quantities of the goods and services used to calculate the index constant over lengthy time periods.
A
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A price floor policy establishes a minimum price for a market. Which of the following results from a binding price floor?
A) Equilibrium B) Excess demand C) Excess supply D) Shortage
In order to increase sales the firm can
a. Increase the reference price for the product b. Decrease prices c. Differentiate their product d. All of the above
If the quantity demanded exceeds the quantity supplied in a market, then the result is which of the following?
a. Deadweight loss b. Inefficiency c. Underproduction d. Each of these are true.
Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real GDP and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. There is not enough information to determine what happens to these two macroeconomic variables. b. Real GDP rises, and reserve-related (central bank) transactions become more positive (or less negative). c. Real GDP and reserve-related (central bank) transactions remain the same. d. Real GDP rises, and reserve-related (central bank) transactions remain the same. e. Real GDP falls, and reserve-related (central bank) transactions become more negative (or less positive).