Which of the following is false?
a. The most well known price index is the consumer price index, which provides a measure of the trend in the prices of goods and services purchased for consumption purposes.
b. The GDP deflator measures the average level of prices of all final goods and services produced in the economy.
c. The CPI is the price index that is most relevant to households trying to evaluate their changing financial position over time.
d. A price index is equal to the cost of the chosen market basket in the base year, divided by the cost of the same market basket in the current year, times 100.
d
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At the beginning of the Vietnam War, increased military spending in the United States decreased unemployment
Indicate whether the statement is true or false
Even when two goods are perfect substitutes one can sell at a premium over the other depending on the tastes and preferences of the consumers
Indicate whether the statement is true or false
A good approximation of a country's standard of living is per capita GDP, which is population divided by real GDP.
Answer the following statement true (T) or false (F)
The open economy effect suggests that
A. a rise in domestic price level will cause domestic residents to buy fewer imported goods. B. a rise in domestic price level will cause foreign residents to buy more domestic goods. C. a decrease in domestic price level will cause foreign residents to buy fewer domestic goods, increasing net exports. D. a decrease in domestic price level will cause foreign residents to buy more domestic goods, increasing net exports.