Which of the following is true about the consumer price index?
A) It accounts for people switching to goods whose prices have fallen.
B) It assumes that consumers purchase the same amount of each product in the market basket each month.
C) It frequently updates the price changes of new products added to the market basket, as these have a tendency to fall.
D) It filters out the part of price increases that occurs because of quality improvements in products.
Answer: B
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Suppose the Fed had tried to keep the exchange rate at its 2001 level. In that case the Fed would have ________ dollars and its foreign reserves would have ________
A) bought; decreased B) sold; increased C) sold; decreased D) bought; increased E) None of the above is correct because the Fed cannot affect the exchange rate.
In 2009, which category accounted for the highest share in the U.S. imports?
a. Industrial supplies b. Capital goods c. Services d. Consumer goods
All inputs are increased by the same proportion and the output increases more than proportionately, this means that:
(a) Constant returns to scale are present. (b) Increasing returns to scale are present. (c) Decreasing Returns to Scale. (d) None of the above.
Champlain College in Vermont runs a satellite campus in Dublin, Ireland. This is an example of:
A. foreign portfolio investment. B. exporting. C. importing. D. foreign direct investment.