If consumers reduce the purchase of goods whose relative prices rise (substitution bias), the consumer price index (CPI) will tend to have an upward bias over time (overstates inflation)
a. True
b. False
Indicate whether the statement is true or false
True
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An example of a common pool resource is a broadcast television signal
Indicate whether the statement is true or false
The figure above shows the costs associated with producing paper. When paper is produced, there is some pollution runoff into a lake. Without regulation, ________ tons of paper will be produced and the price will be ________ per ton
A) 3; $150 B) 4; $100 C) 4; $200 D) None of the above answers is correct.
The primary source of shocks to potential output and long-run supply for real business cycle theorists is ________
A) changes in the money supply B) a change in the price of complements C) a change in any of the components of aggregate demand D) shocks to productivity
If autonomous expenditures increased by $10 billion, what is the change in aggregate demand at a given price level if the MPC to consume is 0.8?
a. increase by $50 billion b. increase by $100 billion c. decrease by $100 billion d. decrease by $10 billion