Most economists believe that price indices
A) understate inflation and understate growth in real GDP.
B) understate inflation and understate growth in nominal GDP.
C) overstate inflation and understate growth in real GDP.
D) overstate inflation and understate growth in nominal GDP.
C
You might also like to view...
What are three reasons that employees may prefer to save through pensions provided by employers rather than through savings accounts?
What will be an ideal response?
Consider Frank's decision to go to college. If he goes to college, he will spend $21,000 on tuition, $11,000 on room and board, and $1,800 on books. If he does not go to college, he will earn $16,000 working in a store and spend $7,200 on room and board. Frank's cost of going to college is
a. $33,800. b. $42,600. c. $49,800. d. $57,000.
Which statement is correct?
A. Because of its ability to administer prices, the pure monopolist can increase its price and increase its volume of sales simultaneously. B. In the short run, the pure monopolist will charge the highest price it can get for its product. C. Pure monopolists do not always realize economic profits. D. In the short run, the pure monopolist will maximize total profits by producing at that level of output where the difference between price and average total cost is greatest.
Suppose consumption is $60,000 when income is $90,000 and the MPS equals 0.25. When income increases to $100,000, consumption is
A. $90,250. B. $85,000. C. $70,000. D. $67,500.