If we compare the CPI to a perfect cost of living index, we find that they are
A) different because the CPI does not measure prices.
B) the same thing.
C) not the same because the CPI has a fixed reference base period.
D) different because the CPI uses a fixed basket and has some measurement difficulties.
E) different because the cost of living has nothing to do with prices.
D
You might also like to view...
The large increase in household wealth in the United States in the 1990s was the result of:
A. large capital gains. B. a low saving rate. C. a high saving rate. D. high rates of inflation.
According to the textbook, price discrimination is
A) illegal. B) morally justified. C) net-revenue maximizing. D) unfair to the different groups of customers.
Economic efficiency occurs when the firm produces a given output
A) by using the least amount of inputs. B) by using the maximum amount of inputs. C) at the least cost. D) at the greatest cost.
Efficiency in the provision of a public good is achieved when its
A) total social benefit equals its total social cost. B) average social benefit equals its average social cost. C) marginal social benefit equals its marginal social cost. D) marginal social benefit equals zero.