Which of the following is the major difference between the chained consumer price index and the regular consumer price index?
a. The chained index assumes that households purchase the same bundle of goods over a lengthy time period; the regular price index makes allowance for shifts away from goods that have become more expensive.
b. The chained index makes allowance each month for shifts away from goods that have become more expensive; the regular consumer price index fails to adjust for these shifts.
c. The chained consumer price index reflects changes in the prices of all final goods and services produced during a period, whereas the regular consumer price index reflects only changes in the prices of goods purchased by households.
d. The chained consumer price index will generally result in a higher measured rate of inflation than the regular consumer price index.
B
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Refer to the figure above. The increase in output due to the same one-unit increase in capital is greatest at point ________
A) A B) B C) C D) D
A perfectly inelastic demand means:
A. consumers will change the quantity they purchase when price changes. B. demand will drop to zero if the price increases by any amount. C. consumers will not change the quantity they purchase when price changes. D. the demand curve is perfectly horizontal.
Ceteris paribus refers to all of the following ideas except
a. changing just one variable at a time b. holding everything else constant c. everything else being equal d. one-to-one cause and effect relationships e. in the absence of other influences
When people expect their income to be lower in the future, they will be:
A. more inclined to save. B. unaffected in their present choices. C. less inclined to save. D. People only react and change their savings decisions based on recent history.