If the CPI overstates the true rate of inflation, then
a. the economy will grow more slowly than if inflation was measured accurately
b. the economy will grow more rapidly than if inflation was measured accurately
c. social security payments will increase in real terms
d. social security payments will decrease in real terms
e. so will other means of measuring the inflation rate
C
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Answer the following statement(s) true (T) or false (F)
1. The Axelrod study shows that "Tit-for-Tat" is a successful strategy for playing a repeated Prisoners' Dilemma game. 2. The Peltzman study shows consumers overall have benefited from the requirement that drug manufacturers prove the safety and effectiveness of their products. 3. Consumers will be better off when the government imposes minimum quality standards. 4. The Stigler and Friedland study shows that regulation always has significant effects on price, although those effects may be positive or negative. 5. Contestable market conditions will cause a natural monopoly to produce the competitive quantity.
Figure 5-5 shows a consumer budget line for French fries and hamburgers. The household allocates a budget for these two goods. If the price of an order of french fries is $2, how much income is allocated to fries and burgers combined?
A. $2 B. $4 C. $10 D. $20
The main determinant of the discount rate on a privately issued bank note was:
a. how long the issuing bank had been in operation. b. who was on the issuing bank's board of directors. c. the general reputation of the issuing bank. d. the distance of the issuing bank from the location where the note was being used.
Suppose two demand curves intersect and so have a point in common. At that point, demand shown by the steeper curve will be ________ the flatter curve.
A. as elastic as B. more likely to be unit elastic than C. more elastic than D. less elastic than