Answer the following statements true (T) or false (F)
1. If one city has a higher CPI than another city, the city with the higher CPI must have a higher cost of living.
2. COLA is a form of indexation.
3. Only wages or income can be indexed to the CPI.
4. Indexation is a good means of reducing inflation.
5. The value or purchasing power of the dollar can be obtained by dividing $1 by the CPI.
1. FALSE
2. TRUE
3. FALSE
4. FALSE
5. TRUE
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Which of the following is true about price elasticity of supply?
A) Price elasticity of supply = Percentage change in quantity supplied / Absolute change in price B) Price elasticity of supply = Percentage change in quantity supplied / Percentage change in price C) Price elasticity of supply = Percentage change in quantity supplied × Absolute change in price D) Price elasticity of supply = Percentage change in quantity supplied × Percentage change in price
M1 is considered ___________ measure of money compared to M2.
A. a more legitimate B. a less legitimate C. just as legitimate a D. a more stable
What is calculated as MP x P?
a. revenue gained from the output of an additional worker b. increase in costs associated with an increase in labor c. change in output associated with a change in input d. market price (value) of the company’s total output
If the quantity demanded is infinitely responsive to any change in price, the demand curve is:
A. upward sloping. B. downward sloping. C. horizontal. D. vertical.