List the five steps for calculating the consumer price index and inflation rate
(1) Survey consumers to determine a fixed basket of goods, (2) find the price for each good, (3) calculate the cost of a basket of goods for each period, (4) calculate the consumer price index, and (5) calculate the inflation rate.
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Other things remaining the same, which of the following is likely to increase both the wage rate and the number of workers hired in a steel-producing factory?
A) An increase in the opportunity cost of leisure B) A decrease in the opportunity cost of leisure C) The introduction of labor-saving technology in the factory D) The introduction of labor-complementary technology in the factory
When economist make normative statements they are?
a. speaking as scientists. b. speaking as policy advisers. c. making claims about how the world is. d. revealing that they are very liberal in their views of how the world works.
What does the classical model predict will happen when an increase in aggregate demand causes the overall price level to rise?
a. Sticky upward prices will allow producers to quickly boost their output. b. Input suppliers will compete against each to quickly drive down input prices. c. A prolonged inflationary gap will occur at the higher price level. d. Input suppliers will bid up input prices to quickly adjust to the higher price level.
Over a 10-year period, the Consumer Price Index doubled. On the basis of this information we can say that the average annual rate of inflation over this period was approximately:
A. 5 percent. B. 9 percent. C. 10 percent. D. 7 percent.