Economists generally believe that, relative to the true cost of living, the CPI
A. understates it by a factor of 2 (meaning that inflation is actually twice as bad as the government states).
B. overstates it by a factor of 2 (meaning that inflation is really only half as bad as the government states).
C. is perfectly measured.
D. overstates it by a difference of about .8% (meaning that an official inflation rate of 1.8% is really only about 1%).
Answer: D
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One way to sidestep the debate over whether the government should increase spending during economic downturns is to:
A. cut government spending so the government has no ability to spend money. B. return to the gold standard so that the value of the U.S. dollar remains strong. C. identify projects that nearly everyone can agree the government should fund. D. raise taxes so that the government has the money it needs for additional spending.
If the government decreases the tax on cell phones, ________
A) the deadweight loss decreases B) the consumer surplus does not change because sellers will not lower the price of a cell phone C) the number of cell phones purchased does not change D) the market becomes less efficient because the government collects less tax revenue
How would a marketing campaign directed at single women improve the chances of success at a place like a cigar bar?
What will be an ideal response?
The following are all functions of money except
A) medium of exchange. B) store of value. C) unit of account. D) source of anxiety.