Indexing is the process of:
A. increasing a real quantity by an amount equal to the percentage change in a price index.
B. dividing a real quantity by a price index.
C. dividing a nominal quantity by a price index.
D. increasing a nominal quantity by an amount equal to the percentage change in a price index.
Answer: D
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To find the opportunity cost of producing one more unit of any product while on the production possibilities frontier requires
A) subtracting the change in the product whose production increased from the change in the product whose production decreased. B) dividing the amount of the product forgone by the amount of the product gained. C) setting the amounts of the two products equal to each other. D) setting the change in one product equal to the change in the other product. E) None of these describes how to find opportunity cost.
Rapid inflation makes holding a large amount of money: a. wiser, because you will generally need more and more to buy the goods and services you want. b. less wise, because the opportunity cost of holding money is high
c. less wise, because someone might steal it, or it might be destroyed. d. wiser, because the opportunity cost of holding money is high.
Taking action to reveal one's own private information is called:
A. screening. B. statistical discrimination. C. signaling. D. proofing.
Which of the following is a positive economic statement?
a. Too much government spending is the biggest problem facing the U.S. economy. b. Creating jobs is the most serious problem facing the U.S. economy. c. Raising taxes provides additional revenue that should be used to finance health care. d. If taxes are over 50 percent of national income, job creation falls.