A year's tuition at a state university cost $250 in 1972 when the CPI equaled 0.418. The cost of a year's tuition at the same state university cost $3,000 in 2005 when the CPI equaled 1.68. The real cost of tuition between 1972 and 2005:
A. decreased.
B. may have either increased or decreased.
C. remained constant.
D. increased.
Answer: D
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Refer to Figure 11-7. If output is 100 units what is the fixed cost of production?
A) $8 B) $800 C) $1,000 D) This cannot be determined from the diagram.
"All available information" in the definition of rational expectations means that
a. agents use all possible information that could be out there. b. agents use all possible public information that could be out there. c. agents use all information that is relevant. d. agents use all information that is available in which the marginal benefits of the information are greater than the marginal costs of gathering the information.
Supply-side economists argued that, given existing tax laws, the high inflation of the 1970s
a. lowered the effective tax rate on corporate income. b. did not have any effect on the aggregate supply curve. c. raised the effective tax rate on corporate income. d. may have raised but probably lowered the effective tax rate on corporate income. e. both b and c.
The trough of a contraction is
A) the point in time at which the level of national business activity reaches a minimum before expanding again. B) the point in time at which the level of national business activity reaches a maximum before contracting again. C) the rate at which the level of business activity is declining. D) an external shock that causes economic activity to decline.