Suppose the consumer price index (CPI) for Year X is 130. This means the average price of goods and services is:
A. currently $130.
B. 130 percent more in Year X than in the base year.
C. 130 percent more in the base year than in Year X.
D. priced at 30 percent more in Year X than in the base year.
Answer: D
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Which of the following illustrates the concept of external benefit?
A) Good weather increases the size of the wheat crop. B) A new pesticide increases the size of the wheat crop. C) A gardener enjoys his flowers. D) Neighbors enjoy a gardener's flowers.
When the law of diminishing returns takes effect
A) firms must add increasingly more input if they are to maintain the same extra amount of output. B) firms must add decreasingly more input if they are to maintain the same extra amount of output. C) more input must be added in order to increase its output. D) a firm must always try to add the same amount of input to the production process.
To say that a price floor is binding is to say that the price floor a. results in a shortage
b. is set below the equilibrium price. c. causes quantity supplied to exceed quantity demanded. d. All of the above are correct.
A total cost function will
A. never flatten. B. never slope down. C. never steepen. D. never slope up.