Which of the following makes the Consumer Price Index a less accurate measure of the cost of living?
i. The monthly price survey conducted to collect information about prices is very unreliable.
ii. The existence of a new goods bias in the calculation of the CPI
iii. The existence of a quality change bias in the calculation of the CPI
A) i, ii, and iii B) i and ii C) i only D) ii only E) ii and iii
E
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You place $100 in a bank account that pays 8%. If you remove the interest you receive each year you can turn your stock into a flow of
A) $108 per year. B) $100 per year. C) $80 per year. D) $8 per year.
If a country pegs its currency to a foreign currency, it no longer has the ability to use monetary policy to stabilize the economy because:
A. it no longer has a central bank. B. banks will begin to hold 100 percent of their deposits in reserves. C. monetary policy must be used to keep the exchange rate's market equilibrium value at its official value. D. it must eliminate its currency from circulation and replace it with the foreign currency.
What is the relationship between the long-run supply curve in a constant-cost industry and elasticity?
What will be an ideal response?
If sellers could price-discriminate and charge two different prices to two different groups of buyers in order to increase revenues, then the sellers would charge:
A. A higher price to the buyers whose demand is elastic B. A higher price to the buyers whose demand is inelastic C. A higher price to the buyers whose demand is unit-elastic D. The same price actually, because price-discrimination will result in lower revenues