Last year the price of a dozen eggs was $1, and this year the price is $1.30. Which of the following does NOT express this price change accurately?
A) The price increased 30 percent.
B) The price increased by 30 cents.
C) If last year was the base year, the index number for this year would be 130.
D) If this year is the base year, the index number for last year would be 130.
D
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If businesses forecast significant economic growth in the future, they may: a. decrease their investment spending. b. increase their investment spending
c. decrease their consumption spending. d. increase their consumption spending.
Use the above table. Assuming constant opportunity costs, the opportunity cost of producing donuts in country Alpha is ________, and the opportunity cost of producing donuts in country Beta is ________
A) 1 donut; 0.17 donut
B) 1 donut; 6 donuts
C) 10 donuts; 12 pizzas
D) 0.2 pizza; 1.67 donuts
Assume that maximum feasible hourly productions levels if all resources are utilized in the United States are either 3 yards of fabric or 9 bushels of wheat. Maximum feasible production levels if all resources are utilized in Japan are either 6 yards of
fabric or 12 bushels of wheat. Based on this information A) beneficial trade is absolutely impossible between the two countries. B) the United States will benefit from trading but Japan will not. C) both nations will gain from specialization and trade, with the United States exporting wheat and Japan exporting fabric. D) Japan should specialize in both products.
The liquidity trap refers to the situation where:
A. the Fed adds excess reserves to the banking system, but it has minimal positive effect on lending, investment, or aggregate demand. B. excessive consumer debt limits the growth in consumer spending necessary to bring the economy out of recession. C. the public debt is so large that federal borrowing drives up interest rates and discourages private sector spending. D. a financial crisis causes a run on banks and the elimination of billions in excess reserves.