If the price of gasoline has increased from $2 per gallon to $4 per gallon at the same time that the overall price index increased from 200 to 400, then you know that the inflation adjusted price of gasoline has
A. decreased.
B. increased.
C. remained constant.
Answer: C
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If the instruments are not exogenous,
A) you cannot perform the first stage of TSLS. B) then, in order to conduct proper inference, it is essential that you use heteroskedasticity-robust standard errors. C) your model becomes overidentified. D) then TSLS is inconsistent.
When the supply of money rises, interest rates _____.
Fill in the blank(s) with the appropriate word(s).
In the U.S. economy, a large portion of investment decisions are made by
A. households. B. the private sector. C. the public sector. D. international organizations.
Suppose a U.S.-made machine costs $500 and the exchange rate is 100 yen = $1. A Japanese citizen purchasing this machine would pay:
A. 500 yen. B. 5,000 yen. C. 10,000 yen. D. 50,000 yen.