Core inflation is measured because the prices of:
A. nondurable goods fluctuate more frequently than the prices of durable goods; therefore, removing them from the basket prevents potential distortion.
B. durable goods fluctuate more frequently than the prices of nondurable goods; therefore, removing them from the basket prevents potential distortion.
C. food and energy costs fluctuate frequently and can distort actual changes in the cost of living.
D. retail consumption items fluctuate frequently and can distort actual changes in the cost of living.
Answer: C
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If the bidders at an oral auction have true values of $8, $7, $6, and $5, the item will sell for
a. $8 b. $7 c. just over $7 d. just under $7
A luxury good has
A) a negative income elasticity. B) a cross elasticity of one. C) a very high income elasticity. D) a negative price elasticity.
A nation has a positive net capital outflow. Which of the following is correct?
a. Purchases of foreign assets by domestic residents exceed purchases of domestic assets by foreigners b. It has positive net exports. c. Its savings exceeds its domestic investment. d. All of the above are correct.
A Lorenz curve that becomes less bowed out implies:
A. no change in income distribution. B. a change in income distribution toward more equality. C. an increase in poverty. D. a change in income distribution toward more inequality.