The Consumer Price Index (CPI) relies on the calculation of:
A. prices of a fixed basket of goods that does not change often.
B. prices of a variable basket of goods that changes frequently.
C. the components of GDP that change annually.
D. the components of GDP that do not change frequently.
Answer: A
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Refer to the scenario above. Suppose the decision to levy a tax on emission of greenhouse gases costs 500 utils in present value and that the discount weight attached to the future benefit is 1/17
In this case, the net benefit earned by the people is: A) -300 utils. B) -441.18 utils. C) 333.65 utils. D) 420 utils.
Joanne rents out her apartment in Seattle to Alice as she is moving to Dallas for the next three years. Which of the following statements must be true?
a. Alice's valuation of the apartment is higher than Joanne's opportunity cost of renting it. b. Joanne's valuation of the apartment is higher than Alice's. c. This transaction creates no economic value for Alice. d. Alice's valuation of the apartment is lower than Joanne's opportunity cost of renting it.
The period of declining growth in real GDP, between the peak of the business cycle and the trough, is called the: a. contractionary phase. b. boom
c. expansionary phase. d. static phase.
How might the implementation of price controls have a negative effect?
a. by strengthening the market’s information-transmission system too much b. by closely aligning the economic decisions of households and firms c. by depriving the market price of its meaning for buyers and sellers d. by enforcing the equitable distribution of scarce resources.