If the CPI in year 2 equals 110 and the CPI in year 3 equals 121, it can be concluded that consumer prices:
A. rose from year 2 to year 3 by 21 percent.
B. rose from year 2 to year 3 by 10 percent.
C. are the same in year 2 as in the base year.
D. rose from year 2 to year 3 by 11 percent.
Answer: B
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How did Adam Smith explain the cause of the wealth of nations?
A) The growth of the middle class B) The growth in the average level of prices C) The growth of the division of labor D) People's unending urge to consume
An increase in exports of goods or services with no change in imports of goods or services
A) decreases GDP. B) increases GDP. C) may increase or decrease GDP depending on whether it is the export of goods or the export of services that increased. D) has no effect on GDP.
Holding other things constant, decreases in the price level in the US will
a. Cause the dollar to appreciate b. Cause the dollar to depreciate c. Cause no change in dollar value d. None of the above
Incorporation of expectations into economic decision making indicates that in the long run:
a. inflation relates directly to unemployment. b. inflation is inversely related to unemployment. c. the Phillips curve is vertical at the natural rate of unemployment. d. high unemployment is a primary cause of inflation.