Which of the following measures changes in the average price of consumer goods and services?
A. Deflation rate.
B. CPI.
C. Inflation rate.
D. Market basket.
Answer: B
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Refer to Figure 1A.1. The slope of the line between the points where income equals 50 and income equals 200 is
A) 0.2. B) 5. C) 10. D) 50.
Assume that an increase in Costa Rica's government budget deficit reduced desired national saving by 10 million colon. Assuming Costa rice is a small open economy, you would expect the government's action to
A) increase the current account balance by exactly 10 million colon. B) increase the current account balance by less than 10 million colon. C) reduce the current account balance by exactly 10 million colon. D) reduce the current account balance by more than 10 million colon.
The marginal productivity theory of distribution holds that
a. each factor is paid what it deserves. b. the owner of each factor is paid the amount that the factor contributes to earnings. c. each factor's income depends on how hard it works. d. each factor receives an equal share of the revenue from production.
The decision about what goods and services will be produced in a market economy is made by
A) lawmakers in the government voting on what will be produced. B) workers deciding to produce only what the boss says must be produced. C) producers deciding what society wants most. D) consumers and firms choosing which goods and services to buy or produce. E) consumers dictating to firms what they need most.