The broadest-based price index available is the
A. consumer price index.
B. wholesale price index.
C. GDP deflator.
D. producer price index.
Answer: C
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An economist at the University of Alaska at Anchorage has been asked to explain why the price of Alaskan crude oil has fallen recently. In order to develop a model, the professor should take which steps?
a. Identify the problem, develop a model based on simplifying assumptions and test the model to formulate a conclusion. b. Gather data on crude oil prices and seemingly unrelated variables in order to look for associations, then formulate a hypothesis based on those unexpected associations. c. Ask people in Alaska why they are not purchasing oil. d. None of these. The oil industry is controlled by a cartel; therefore price changes in the industry cannot be explained using economic theories.
Which of the following statements is correct?
a. As a group, economists see no purpose in distinguishing between the nominal interest rate and the real interest rate. b. The interest rate that is usually reported is the nominal interest rate. c. If the nominal interest rate increases and the inflation rate remains unchanged, then the real interest rate decreases. d. All of the above are correct.
In 1990, Britain joined the ERM. If the German Bundesbank increased interest rates, assuming Britain does not maintain its exchange rate peg:
A) the only option available to Britain would be to increase its interest rate. B) the British pound would depreciate. C) the British pound would appreciate. D) the British economy would slow down.
Assume there are no taxes or imports. The government estimates that between 2012 and 2013 disposable income decreased by $400 billion and consumption expenditure decreased by $280 billion. Based on this data, the multiplier equals:
a) 0.33 b) 0.7 c) 1.42 d) 3.33