The consumer price index (CPI) _____ inflation because it includes an item in the market basket only after the product becomes _____
a. overstates; unpopular
b. overstates; obsolete
c. overstates; widely used
d. understates; widely used
e. understates; obsolete
c
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The supply and demand for saving are brought into equilibrium by adjustments of the ________ rate.
A. dividend B. real interest C. nominal interest D. discount
Rational individuals prefer to consume goods during the current year rather than in the future because of:
a. positive time preference. b. positive consumption preference. c. high expected rate of inflation. d. high market rate of interest.
If two partners have a firm with more debt than assets,
a. the business is a success b. the partners are equally liable for the debt c. there is a limit to their personal liability d. each one's liability is limited to the investment made in the business e. the burden of debt is proportionate to the partners' original investment
The minimum amount of reserves the Fed requires a bank to hold, based on a percentage of the bank's total deposit liabilities, is known as
a. excess reserves b. actual reserves c. the legal reserve requirement d. the Fed stipulation rate e. the countercyclical rate