How do we calculate the inflation rate and what is its relationship with the CPI?
What will be an ideal response?
The inflation rate is the percentage change in a price index from one year to the next. The rate of change of the CPI is often used as a measure of inflation as faced by consumers.
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In a simple economy without government or foreign trade, any income not consumed is called
A) net investment. B) depreciation. C) saving. D) investment.
A shift in demand occurs when
A) the price of that good changes. B) the amount demanded of a good changes at each existing price. C) there is a change in quantity demanded. D) the price changes and the good is a normal good.
Suppose a little girl likes peanut butter and jelly sandwiches with exactly 2T of jelly and 1T of peanut butter. Suppose further that her mom agrees to make sandwiches to those exact specifications and the price of peanut butter is $.25/T and the price of jelly is $.10/T. If she has $1.80 to spend on peanut butter and jelly ingredients (ignore the bread) in a week, how many sandwiches will she
make? a. 1 b. 2 c. 4 d. 8
Which of the following is the most accurate statement about a production possibilities curve? a. An economy can produce at any point inside or outside its production possibilities curve
b. An economy can produce only on its production possibilities curve. c. An economy can produce at any point on or inside its production possibilities curve, but not outside the curve. d. An economy can produce at any point inside its production possibilities curve, but not on or outside the curve.