The fact that the CPI is a biased measure of the inflation rate means government outlays will
A) increase at a slower rate than the actual inflation rate.
B) increase at the same rate as the actual inflation rate.
C) increase at a faster rate than the actual inflation rate.
D) sometimes increase faster and sometimes increase slower than the actual inflation rate depending on whether the actual inflation rate exceeds 1.1 percent per year or is less than 1.1 percent per year.
E) None of the above because the bias in inflation measured using the CPI has nothing to do with government outlays.
C
You might also like to view...
Who would the BLS count as unemployed? The person who
A) searches for a job after retiring from the military. B) quits work and intends to stay at home raising his kids. C) was fired from work and decides to attend college full time rather than seek work. D) is dissatisfied with her present job and spends hours reading the help-wanted ads.
What is meant by the term "government-imposed barrier to entry"? Why would a government be willing to impose barriers to entering an industry?
What will be an ideal response?
The above figure shows the market for steel ingots. If the market is competitive, then to achieve the socially optimal level of pollution, the government can
A) outlaw the production of steel. B) institute a specific tax of $25. C) institute a specific tax of $50. D) institute a specific tax equal to area b.
Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss
As shown in Exhibit 3A-2, if the market is in equilibrium, then total surplus is represented by:
A. ACBEFD - BEF B. AEFD + ACBE C. BEG + EFH D. CBEFDA + EGH