Which of these events would cause the consumer price index to overstate the increase in the cost of living?
a. Car makers benefit from a new technology that allows them to sell higher-quality cars to consumers with no increase in price.
b. Energy prices decrease, and consumers respond by buying more gas and electricity.
c. A new good is introduced that renders cellular telephones inferior and obsolete.
d. All of the above are correct.
d
You might also like to view...
Resource use is allocatively efficient when marginal benefit is
A) greater than marginal cost. B) equal to marginal cost. C) less than marginal cost. D) at its maximum value.
Assume the government is concerned about the high price of Atlantic Red Crab and announces that it is going to shorten the fishing season to one week
What impact will this have on the quantity of crab caught and the price of crab? Will this actually result in greater protection of the Atlantic Red Crab?
The marginal propensity to consume is equal to:
a) Total spending / total consumption b) Total consumption / total income c) Change in consumption / change in income d) Change in consumption / change in savings
Government expenditures for social security and unemployment insurance are, for GDP accounting purposes, considered ________.
A. government purchases, and are not included in government spending as part of GDP B. transfer payments, and are not included in government spending as part of GDP C. transfer payments, and are included in government spending as part of GDP D. government purchases, and are included in government spending as part of GDP