In computing the consumer price index, a base year is chosen. Which of the following statements about the base year is correct?
a. The base year is always the first year among the years for which computations are being made.
b. It is necessary to designate a base year only in the simplest case of two goods; in more realistic cases, it is not necessary to designate a base year.
c. The value of the consumer price index is always 100 in the base year.
d. The base year is always the year in which the cost of the basket was highest among the years for which computations are being made.
c
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Who said "The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist."
A. Adam Smith B. Karl Marx C. John Maynard Keynes D. John Stuart Mill
Which one of the following transactions would be included in GDP?
A. Ms. Kim pays $50 for a used picture frame at a neighborhood garage sale. B. Mr. Doe donates $500 to his town's junior college scholarship fund. C. Ms. Bartolini pays $500 to fix the front end of her car damaged in a recent accident. D. Ms. Smith pays $5,000 to purchase 100 shares of Microsoft stock.
Argentina's experience since 1990 suggests that adopting a currency board imposes strict discipline on the country's fiscal policies.
Answer the following statement true (T) or false (F)
Refer to the diagrams in which figures (a) and (b) show demand curves reflecting the prices Alvin and Elmer are willing to pay for a public good, rather than do without it. If the marginal cost of the optimal quantity of this public good is $10, the
optimal quantity must be:
A. 1 unit.
B. 2 units.
C. 3 units.
D. 4 units.