Suppose the Bureau of Labor Statistics uses Ballpark Franks as the hot dogs used when calculating the consumer price index. During 2012, Oscar Mayer aggressively reduces prices
Consumers respond by purchasing more Oscar Mayer and less Ballpark Franks. The 2012 CPI is likely to
A) understate the average prices paid by consumers.
B) overstate the average prices paid by businesses.
C) overstate the average prices paid by consumers.
D) understate the average prices paid by businesses.
E) neither understate nor overstate the average prices because some consumers will still buy Ballpark Franks.
C
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According to adaptive expectations theory, which of the following would be the result of expansionary monetary and fiscal policies?
a. There is a short-run reduction in unemployment. b. There is a long-run trade off between inflation and unemployment. c. The inflation rate falls in the long run. d. The economy always operates at the natural rate of unemployment
The introduction of a subsidy in a perfectly competitive marketplace that is originally in equilibrium will raise total surplus
a. True b. False Indicate whether the statement is true or false
The short-run aggregate supply (SRAS) curve shows the quantity
A) demanded of all goods and services at different price levels, ceteris paribus. B) supplied of all goods and services at a particular price level, ceteris paribus. C) supplied of all goods and services at different price levels, ceteris paribus. D) supplied of GDP at a particular price level, ceteris paribus.
What is labor productivity? How does a country's standard of living relate to labor productivity?
What will be an ideal response?