For an imaginary economy, the value of the consumer price index was 140 in 2013, and the inflation rate was 5.0 percent between 2013 and 2014 . The consumer price index in 2014 was
a. 145.0.
b. 147.0.
c. 135.0.
d. 133.3.
b
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Excess capacity is defined as the difference between a firm's maximum possible output and its actual output
a. True b. False
If we read that the CPI had value of 120 in 2005, we would know that
a. the typical market basket in 2005 was 20 percent more expensive than in the previous year b. the typical market basket in 2005 was 120 percent more expensive than in the base year c. the typical market basket in the base year was 120 percent more expensive than in 2005 d. the typical market basket in 2005 was 20 percent more expensive than in the base year e. the cost of a loaf of bread is higher now than it has been during the past ten years
What is the Haig-Simons definition of income? Are there any practical problems in implementing the Haig-Simons definition?
What will be an ideal response?
A decrease in the price of a good enhances the consumer's purchasing power. The income effect applies to both normal and inferior goods by encouraging the consumer to purchase more
a. True b. False