The consumer price index is based on
A. a basket of intermediate goods typically purchased by firms as inputs in the production process.
B. a basket of goods and services purchased by a typical urban family.
C. a basket of goods that consists of every item included in the nation's GDP.
D. None of the choices are correct.
B. a basket of goods and services purchased by a typical urban family.
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If increased supply leads to lower prices, why is rapid growth of the money supply usually accompanied by high interest rates?
What will be an ideal response?
Which of the following can be a valid reason for Canada's GDP exceeding its GNP in 2001?
a. Net factor income from abroad in Canada was negative. b. Canada's GNP measurements were flawed. c. Canada's indirect business taxes were exceptionally high. d. The World Bank underestimated Canada's net exports. e. Canada's residents received more foreign aid than they could spend.
Figure 11-7
The firm in Figure 11-7 is an unregulated monopolist; it will earn long-run profits of how much?
A. 500 B. 400 C. 300 D. 200
When profits exist in a competitive price-searcher market,
a. rival firms will be attracted into the market. b. high barriers to entry will prevent rival firms from entering the market. c. product differentiation will prevent new firms from making a profit. d. the profits will persist because the firms face a downward-sloping demand curve.