The substitution by consumers of one good for another because of relative price changes is:
A. not captured by the CPI and causes the CPI to overestimate the cost-of-living changes.
B. captured by the CPI and causes the CPI to overestimate the cost-of-living changes.
C. not captured by the CPI and causes the CPI to underestimate the cost-of-living changes.
D. captured by the CPI and causes the CPI to underestimate the cost-of-living changes.
A. not captured by the CPI and causes the CPI to overestimate the cost-of-living changes.
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Which of the following is a criticism of the neoclassical counter-revolution school's approach?
a. markets are not competitive in developing countries. b. externalities are common in developing countries. c. inequality may worsen when interventions are removed in developing countries. d. all of the above.
When a monopolistically competitive firm is in long-run equilibrium: a. the demand curve will be perfectly elastic. b. marginal cost must be falling
c. price exceeds marginal cost. d. marginal revenue exceeds marginal cost.
The lack of long-term economic development prevalent among many LDCs is evidence that relatively efficient economic markets may lead to socially undesirable outcomes
Indicate whether the statement is true or false
If the MPC is 0.8 and the APC is 0.9, the MPS equals
A. 1.7. B. 0.1. C. 0.2. D. 0.8.