As a measure of inflation, the principal advantage of the consumer price index over the implicit GDP deflator is that the consumer price index
What will be an ideal response?
is calculated and published monthly.
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Redding Railroad is held liable by the courts for damages to crops growing along its lines caused by sparks flying off when trains pass. The court ordered damage assessment is $100 per adjoining acre though profits per acre are less than this. Currently, about half of the line has adjoining planted farmlands, the other half is not yet developed. As a result
a. farmers are likely to reduce the number of acres they plant. b. farmers are likely to increase the number of acres they plant in order to collect the payment. c. the railroad will increase the number of trains running. d. farmers will accept payments from the railroad equal to lost profits not to plant.
Suppose the nominal interest rate is 15% and the rate of inflation is 3%. The real interest rate is therefore
A) 3%. B) 5%. C) 12%. D) 18%.
Absolute advantage is
A) the ability to produce a good or service at a higher opportunity cost than one's competitors. B) the ability to produce more of a good or service than competitors that have fewer resources. C) the ability to produce more of a good or service than competitors when using the same amount of resources. D) the ability to produce higher quality goods compared to one's competitors.
The "cost of rainforest preservation" can be lowered for developing countries by
(a) the development of alternative rainforest products. (b) research on agriculture in rainforest soils. (c) encouraging rainforest settlement of the poor. (d) subsidies for activities like cattle raising.