______ is a fixed-weight index that is based on a consumption bundle actually purchased in the base year.
A. A Lespeyres price index
B. Compensating variation
C. Real income
D. The inflation rate
A. A Lespeyres price index
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A decrease in the price level in an economy implies that _____
a. the spending multiplier will be equal to the marginal propensity to consume b. there will be an increase in investment c. there will be a decrease in investment d. the value of the spending multiplier will be equal to one e. the value of the spending multiplier will be equal to zero
Necessities such as food and shelter have inelastic demand
a. True b. False Indicate whether the statement is true or false
The maximization of profit and the minimization of losses is the primary factor affecting the economic decision making of:
A. entrepreneurs. B. workers. C. consumers. D. public officials.
Which function of money allows people to specialize in areas in which they have a comparative advantage?
A. unit of accounting B. standard of deferred payment C. medium of exchange D. store of value