Which of the following describes the accuracy of the Consumer Price Index?
A) Changes in the CPI accurately reflect the true rate of inflation.
B) Changes in the CPI understate the true rate of inflation.
C) Changes in the CPI overstate the true rate of inflation.
D) Changes in the CPI are unrelated to the true rate of inflation.
Answer: C
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Pizza and tacos are substitutes, and the price of a pizza increases. Which of the following correctly indicates what happens?
A) The demand for pizzas decreases and the demand for tacos increases. B) The demand for both goods decreases. C) The quantity of tacos demanded increases and the quantity of pizza demanded decreases. D) The quantity of pizza demanded decreases and the demand for tacos increases. E) The demand for each decreases because both are normal goods.
Refer to the scenario above. If the cost of advertising is negligible, what will the outcome of this game be?
A) Company A will advertise its products while Company B will not advertise. B) Company B will advertise while Company A will not advertise. C) Both the companies will advertise their products. D) Neither of the companies will advertise its products.
If a firm in Thailand borrows dollars from a U.S. bank, its interest payments on the loan in bahts will decrease if the baht appreciates against the dollar
Indicate whether the statement is true or false
Under laissez-faire, society’s decisions about how much of every product to produce depend on
A. consumer preferences only. B. production costs only. C. consumer preferences and production costs. D. neither consumer preferences nor production costs.