The Consumer Price Index (CPI) is:
A. a fixed-expenditure-weight index used to measure changes in the GDP Deflator.
B. the least commonly used measure of inflation.
C. an example of an index that uses variable expenditure weights.
D. a fixed-expenditure weight-index used to measure changes in purchasing power for households.
Answer: D
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Average labor productivity is determined by:
A. the number employed, unemployed, and the labor force participation rate. B. consumption, investment, government spending, and net exports. C. the real interest rate, the nominal interest rate, and the rate of inflation. D. the quantity and quality of human capital, physical capital, technology, natural resources, entrepreneurship, and the legal and political environment.
Which of the following is an example of a negative externality?
A) There is an increase in injuries to pedestrians caused by accidents resulting from electronic billboards distracting drivers. B) The opening of a new shopping mall increases the business of nearby restaurants. C) A consumer pays a higher price than another consumer does for the same product. D) Consumers pay a sales tax in addition to the price of a product.
In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower output. C. lower prices. D. None of these is true.
Which of the following statements is true?
a. The demand for tobacco products tends to be elastic. b. Total revenue is maximized when price elasticity of demand is one. c. Goods are said to be price inelastic when the elasticity is greater than two. d. The demand for milk is more elastic than the demand for luxury travel cruises. e. The demand for 5-cent candy is more elastic than the demand for Irish lace tablecloths.