Core inflation is a measure of:
A. the change in the Consumer Price Index with durable goods excluded.
B. an overall rise in prices in the economy.
C. inflation that excludes goods with historically volatile price changes.
D. the Consumer Price Index with durable goods excluded.
Answer: C
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Maggie is trying to convince her friend Hannah to spend the morning at the beach instead of studying economics. Maggie’s argument is that the beach is free so will not cost Hannah anything to go. Maggie even volunteers to drive. Maggie’s argument
a. is correct; it is free to go to the beach. b. is forgetting Hannah’s opportunity cost of not being able to study. c. assumes Hannah has to eat at home or the beach so it will not cost Hannah additional money. d. is forgetting sunk costs.
The largest markets for both U.S. exports and imports in 2011 were
a. China/Japan. b. Western Europe. c. the Pacific Rim countries. d. Canada/Mexico.
Other things being constant, when a firm sells new shares of stock, the
a. supply of the stock increases and the price decreases. b. supply of the stock decreases and the price increases. c. demand for the stock increases and the price increases. d. demand for the stock decreases and the price decreases.