Regardless of the index we use:
A. the measurement of inflation is the same, so we use the one easiest to calculate.
B. we get the same measurements for inflation, so each is equally useful.
C. inflation is measured as a percent increase in the index from one year to the next.
D. we should get an accurate picture of how all consumer goods and services prices changed from year to year.
Answer: C
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Which of the following is likely to happen if there is an increase in entrepreneurial activity in an economy?
A) The productivity of the economy will increase. B) The inflation rate in the economy will decrease. C) The exchange value of its currency in the foreign exchange market will increase. D) The income per capita of the economy will fall.
Which of the following will cause the average fixed cost curve of making cigarettes to shift?
A) a $5 million penalty charged to each cigarette maker B) a $1 per pack tax on cigarettes C) a $3 per hour wage increase D) an increase in the demand for cigarettes
If resources are better suited toward the production of one good than toward another good, then the PPF for those two goods is
A) a straight line. B) bowed outward. C) upward sloping. D) any of the above
If the reserve ratio is 10 percent, $1,400 of additional reserves can create up to
a. $140 of new money. b. $14,000 of new money. c. $140,000 of new money. d. None of the above is correct.