The CPI in year one equaled 1.45. The CPI in year two equaled 1.51. The rate of inflation between years one and two was ________ percent.
A. 6.0
B. 4.0
C. 4.1
D. 4.5
Answer: C
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What is a key criterion involved in deciding a natural monopoly?
A. Size of the firm relative to its competitors B. Size of the firm relative to the total market demand for a product C. Magnitude of profits generated by the company D. A firm’s ability to adapt to market changes
Suppose the market for grass seed can be expressed as
Demand: QD = 100 - 2p Supply: QS = 3p At the market equilibrium, calculate the price elasticities of supply and demand. Use these numbers to predict the change in price resulting from a specific tax.
Price discrimination requires:
a. a firm to be a competitive firm. b. a firm to be able to segment its customers based on different price elasticities of demand. c. arbitrage. d. that the product can be easily resold.
According to a Classical, sound finance perspective on macroeconomics, if an economy is on an inflationary path, the government should run:
A. a budget deficit and increase spending, which will reduce output. B. neither a surplus nor a deficit since changes in deficit spending do not affect output. C. a budget surplus and decrease spending, which will reduce output. D. neither a surplus nor a deficit since changes in spending affect output.