The Consumer Price Index (CPI) measures inflation for every individual
A) True, the weights used in calculating the CPI are adjusted for every individual in the country.
B) True, people all face the same prices and therefore face the same inflation.
C) False, the CPI uses weights based on how much each product represents in the typical household budget.
D) False, the CPI doesn't measure inflation.
C
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Monopoly is characterized by
A) unique products. B) market entry and exit are difficult or impossible. C) non-price competition not necessary. D) All of the above
When relatively few workers have high ability,
A) they will settle for the average wage. B) they will want to signal their ability. C) the premium for high ability is less than when most workers have high ability. D) they do not need to signal their ability.
If the marginal propensity to save (MPS) is 0.25, the value of the spending multiplier is:
a. 1. b. 2. c. 4. d. 9.
If the natural rate of unemployment equals 5 percent and the actual rate of unemployment equals 6 percent, then cyclical unemployment equals:
A. 11 percent. B. 1.2 percent. C. ?1 percent. D. 1 percent.