The CPI is a measure of changes in the average price of consumer goods and services.
Answer the following statement true (T) or false (F)
True
The CPI is a price index that is designed to track the spending patterns of the typical consumer.
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Investment spending will decrease when
A) firms become more optimistic about earning future profits. B) the corporate income tax decreases. C) business cash flow decreases. D) the interest rate falls.
Which of the following statements best represents the opinion of many economists regarding the impact that changes in tax laws have had on recent changes in income inequality in the United States?
A) Reductions in income tax rates have favored high-income individuals more than low-income individuals. As a result, reductions in federal income tax rates have led to more income inequality. B) Reductions in income tax rates probably have had little impact on the distribution of income. C) Reductions in income tax rates have created greater incentives for low-income individuals to work, save, and invest. As a result, reductions in federal income tax rates have led to less income inequality. D) Reductions in income tax rates have been offset by increases in corporate income tax rates and payroll taxes. As a result, greater income inequality in the 1990s has been followed by a more equal distribution of income since 2001.
Joe consumes crawfish and shrimp. His utility function exhibits diminishing marginal utility of crawfish but the marginal utility of shrimp is constant. Will Joe's indifference curves be convex?
What will be an ideal response?
If the interest rate is 10 percent, the net present value of $600 to be received two years from now is
a. $495.87. b. $545.45. c. $600. d. $660.