Suppose that 1982 is the base year for the Consumer Price Index (CPI) and in 2014 the CPI was 190. What does this "190" mean?
A) What cost $100 in 1982 on average cost 190 times as much in 2014.
B) What cost $100 in 1982 on average cost $190 in 2014.
C) What cost $100 in 1982 on average cost 0.19 times as much in 2014 (that is, it cost $19 in 2014).
D) What cost $100 in 1982 on average cost $19 more in 2014.
B
You might also like to view...
"Discretionary fiscal policy is a fiscal action initiated by an act of the Federal Reserve, while automatic fiscal policy is a fiscal action induced by the state of the economy." Is the previous statement correct or incorrect? Explain your answe
What will be an ideal response?
Regulatory policies requiring lenders to extend more low down-payment loans to higher-risk borrowers along with the Fed's low short-term interest rate policy during 2002-2004 caused
a. housing prices to fall during that period. b. a reduction in the use of adjustable rate mortgages to finance the purchase of housing. c. a reduction in housing construction during 2002-2005. d. mal-investment, that is, excessive investment in housing construction during 2002-2005.
Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that the average total cost when 5 units of output are produced is $30, and the marginal cost of the sixth unit of output is $60 . What is the average total cost when six units are produced?
a. $10 b. $25 c. $30 d. $35
Suppose that the firms in the perfectly competitive oat industry currently are receiving a price of $2 per bushel for their product. The minimum possible average total cost of producing oats in the long run is $1 per bushel. It follows that:
A. the price of oats will remain at $2 per bushel in the long run. B. the oat industry is in equilibrium. C. firms in the oat industry will earn economic profits in both the long run and the short run. D. new firms will enter the oat industry.