For purposes of calculating the CPI, the transportation category of consumer spending includes the cost of
a. subways.
b. gasoline.
c. both subways and gasoline.
d. neither subways nor gasoline.
c
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If Ann's utility function is U = W0.5, and she invests in a business which can yield $6,400 with probability 1/5, and $3600 with probability 4/5, then her risk premium to avoid bearing this risk is
A) $36. B) $41.6. C) $64. D) $100.
If you based your estimate on how long it took poor regions of the United States to catch up to the per capita incomes of the rest of the nation, how long do you believe it would take Eastern Europe to obtain per capita incomes comparable to those of Western Europe?
a. About one year. b. About five to ten years. c. About twenty five years. d. Several generations.
If a good has an elastic demand, then:
A. a small percentage change in price will cause a larger percentage change in quantity demanded. B. a small percentage change in price will cause virtually no change in quantity demanded. C. a large percentage change in price will cause a smaller change in quantity demanded. D. any percentage change in price will cause an almost immediate response in quantity demanded.
Over the long run, evidence on the size of the government spending multiplier is
A) estimated to be about 1.5 implying a high degree of effectiveness of spending B) estimated to fall below 1.0 because increases in spending come with higher taxes and lower private C) estimated to be greater than the short run government spending multiplier D) estimated as the ratio of the unemployment rate to government spending per capita