To find the cost of the CPI market basket in the current period we have to multiply the
A) quantities in the CPI market basket by the base period prices.
B) quantities in the CPI market basket by the current period prices.
C) current period quantities in the CPI market basket by the base period prices.
D) current period quantities in the CPI market basket by the current period prices.
E) quantities in the CPI market basket by the base period prices and then multiply by 100.
B
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A bank will consider a car loan to a customer ________ and a customer's checking account to be ________
A) a liability; a liability B) an asset; net worth C) a liability; an asset D) an asset; a liability E) an asset; an asset
Which of the following can happen?
a. Prices are rising and the inflation rate is negative but rising. b. Prices are falling and the inflation rate is positive and falling. c. Prices are falling and the inflation rate is positive and rising. d. Prices are rising and the inflation rate is positive but falling. e. Prices are rising and the inflation rate is negative and falling.
Nominal anchors limit overshooting by:
a. fixing exchange rates. b. distinguishing between permanent and temporary changes. c. slowing down expectations formation. d. limiting temporary changes to exchange rates.
Suppose that Congress allocates $1 billion to clean up after hurricanes in 2016. It also raises taxes by $1 billion to keep the deficit from growing. If the marginal propensity to consume is 0.9, what is the effect on equilibrium GDP?
A) GDP increases by $900,000. B) GDP increases by $10 billion. C) GDP increases by $1 billion. D) GDP does not change.