Exhibit 13-1 Consumer Price Index
Year
ConsumerPrice Index
1
100
2
110
3
115
4
120
5
125
As shown in Exhibit 13-1, the rate of inflation for Year 5 is:
A. 4.2 percent
B. 5 percent.
C. 20 percent.
D. 25 percent.
Answer: A
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According to Adam Smith
A) government intervention in markets is not desirable because an invisible hand leads decisions made in pursuit of self-interest to unintentionally promote the social interest. B) politicians are well-equipped to regulate corporations and intervene in markets to improve market outcomes. C) when big corporations pursue their self-interest of maximum profit, they will inevitably conflict with social interest. D) in a market transaction buyers can either get what they want for less than they would be willing to pay or sellers can earn a profit, but both buyers and sellers can't gain simultaneously.
A firm is considering the purchase of a piece of equipment that will add $200 per year to the firm's revenue forever. If the interest rate is 10 percent, the firm will purchase the equipment so long as it costs less than
a. $1,000 b. $2,000 c. $4,000 d. $6,000 e. $8,000
This table shows the price-level adjustment as compared to the United States. CountryPrice-Level AdjustmentAustralia-0.50China0.25Mexico0.34United States0.00According to the information in the table shown, if someone were to make $35,000, she would be able to buy the most goods and services if she lived in:
A. China. B. Australia. C. the United States. D. Mexico.
For liberals, the United States has a(n)
A. public sector that is too large. B. private sector that is too small. C. economy that is too heavily regulated. D. public sector that is too small.