A price index in its base year:
A. is always greater than 100.
B. is always less than 100.
C. is always equal to 100.
D. cannot be determined without knowing the price level in the base year.
Answer: C
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A rational decision is one that
A. satisfies all desires. B. avoids the intentional allocation of resources. C. assigns available resources in the manner most preferred by decision makers. D. assigns available resources to the uses with the lowest opportunity costs.
A family of four with one wage earner who earns the minimum hourly wage would be
A. well below the poverty line. B. slightly below the poverty line. C. slightly above the poverty line. D. well above the poverty line.
Suppose that income tax revenues are maximized at an average (income) tax rate of 45 percent. If the Laffer curve is a correct diagrammatic representation of the relationship between tax rates and tax revenue, it follows that a tax rate of
A) 35 percent will reduce tax revenues. B) 48 percent will reduce tax revenues. C) 48 percent will generate as much tax revenue as a tax rate of 45 percent. D) 35 percent will generate as much tax revenue as a tax rate of 45 percent. E) a and b
What are the likely effects of a U.S. antidumping duty on imported steel?
a. The U.S. terms of trade will improve and U.S. steel imports will rise. b. The U.S. terms of trade will worsen and U.S. steel imports will rise. c. The foreign price of steel will rise and the United States will avoid deadweight losses. d. The U.S. price of steel will rise and the United States will suffer deadweight losses.