Which one of the following statements is TRUE of the Consumer Price Index (CPI)?
A. It does not take account of the price of imported goods and services.
B. It measures changes in prices of a fixed basket of goods.
C. It does not take into account the price of used goods.
D. It understates the true rate of inflation.
Answer: B
You might also like to view...
In laboratory experiments, how do animals respond to economic stimuli?
a. The animals' behaviors are consistent with economic theory. b. The animals' responses are random and unpredictable. c. The results indicate that the animals' tastes must be constantly changing. d. The animals do not respond at all to subtle variations in "prices" and "incomes."
Isoquants from fixed-proportion production functions are
A. upward sloping. B. shaped as horizontal lines. C. shaped as right angles. D. downward sloping.
Fiscal policy refers to changes in
A) the money supply and interest rates that are intended to achieve macroeconomic policy objectives. B) federal taxes and purchases that are intended to fund the war on terrorism. C) state and local taxes and purchases that are intended to achieve macroeconomic policy objectives. D) federal taxes and purchases that are intended to achieve macroeconomic policy objectives.
The Bulgarian currency, the lev, is pegged to the euro at a rate of 1.96 leva (leva is the plural of lev) to the euro. At the pegged exchange rate, how many euros would be exchanged for one lev?
A) 0.51 B) 1.00 C) 1.96 D) 3.84