The price index that measures the cost of a basket of goods and services bought by firms is called the
a. industrial price index.
b. producer price index.
c. core price index.
d. GDP deflator.
b
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
National banks are chartered by the
A) Office of the Comptroller of the Currency. B) Office of Bank Supervision. C) Securities and Exchange Commission. D) Office of Management and the Budget.
The two primary explanations for the excess volatility of consumption are
A) consumers' limited life spans and credit market imperfections. B) credit market imperfections and changes in market prices. C) changes in market prices and distorting taxes. D) distorting taxes and consumers' limited life spans.
When talking about aggregate supply, it is necessary to
A) focus on the short run. B) focus on the long run. C) distinguish between the long-run aggregate supply curve and the short-run aggregate supply curve. D) distinguish between the long-run aggregate supply curve and the long run aggregate demand curve when all adjustments to price level changes have been made.