If the price of motel rooms increases by 10% while the prices of other goods and services increase by 5% on average, the relative price of motel rooms has:
A. decreased by 5%.
B. decreased by 10%.
C. increased.
D. remained constant.
Answer: C
You might also like to view...
Which of the following is NOT true for monopoly?
A) The profit maximizing output is the one at which marginal revenue and marginal cost are equal. B) Average revenue equals price. C) The profit maximizing output is the one at which the difference between total revenue and total cost is largest. D) The monopolist's demand curve is the same as the market demand curve. E) At the profit maximizing output, price equals marginal cost.
Economic growth due to labor force expansion or capital investments will result in I. A leftward shift of short-run aggregate supply. II. A rightward shift in long-run aggregate supply
A) I only B) II only C) Both I and II D) Neither I nor II
The long-run trend of real wages:
A. cannot be determined from available data on nominal wages and the price level. B. has been downward because the price level has risen faster than nominal wages. C. has been upward. D. has been downward because labor's share of the domestic income has fallen.
The GDP deflator is
A. the least used index because it is so costly to calculate. B. an index that utilizes a consumer's market basket of goods in calculating the inflation rate. C. the most general indicator of inflation since it measures changes in the prices of all goods and services in the economy. D. an index used to calculate inflation at the wholesale level.