When constructing an overall measure that shows inflation in the prices of many different items, economists consider:
a. the average of the price changes of all goods
b. the total cost of purchasing a basket of goods and services.
c. the changes in the prices of only luxury goods.
d. the changes in the prices of only nondurable goods.
b
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Answer the next question using the following budget information for a hypothetical economy. Assume that all budget surpluses are used to pay down the public debt. Government SpendingTax RevenuesGDPYear 1$450$425$2,000Year 25004503,000Year 36005004,000Year 46406205,000Year 56805804,800Year 66006205,000The budget deficit in year 3 is
A. $3,050 billion. B. $295 billion. C. $175 billion. D. $100 billion.
If both Ben and Catherine value good X more than good Y, a firm can increase profits by bundling the two products
Indicate whether the statement is true or false
An annually budgeted budget can only be met if automatic stabilizers are effective
a. True b. False Indicate whether the statement is true or false
(Advanced analysis) Suppose that the linear equation for consumption in a hypothetical economy is C = 50 + 0.9 Y. Also suppose that income (Y) is $400. Determine the following: (a) MPC; (b) MPS; (c) level of consumption; (d) APC; (e) APS.
What will be an ideal response?