The consumer price index is subject to substitution bias because
a. some pairs of goods are complements rather than substitutes.
b. some goods are inferior rather than normal.
c. the law of demand applies to most, if not all, goods.
d. the index does not take into account the likelihood that consumers substitute newly-introduced goods for more-established goods.
c
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Which of the following statements is correct?
A. Structural unemployment is unemployment resulting from changes in the structure of consumer demand or technology. B. Search unemployment is the broadest unemployment category because it covers all other types of unemployment. C. Frictional unemployment is the result of friction between labor and management over how best to perform work. D. Cyclical unemployment is also called wait unemployment because this unemployment depends on the timing of the business cycle.
Between 1820 and 1840 freight rates on western rivers declined drastically. The main reason for this drop in prices was _________
a. the decline in the price level. b. tolls and other barriers to trade decreased. c. the decline in monopoly power. d. the frequent use of the steamboat.
Which of the following will be required for a country to move up the income ladder and achieve high-income status?
a. rapid growth of the money supply. b. restrictions limiting the import of goods from other nations, particularly low-wage countries. c. tax incentives that encourage consumption rather than investment d. sustained economic growth
A country will specialize in the good for which
A) it has absolute advantage. B) it has moderate production costs. C) it can produce at minimum average cost. D) it has comparative advantage.