Suppose the base year of the CPI is 2010, and the CPI calculated for 2012 was 102. What is the correct interpretation of this number?
A. Average prices in the economy have increased by 102 % since 2010.
B. Average prices in the economy have increased by 1.9 % since 2010.
C. The cost of living for a typical consumer is 2 % higher than it was in 2010.
D. The average goods of all consumers has risen an average of 2 % from 2010 to 2012.
C. The cost of living for a typical consumer is 2 % higher than it was in 2010.
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If profits are reinvested in the corporation, then
A) payments made to bondholders will be less. B) there are fewer funds available to distribute to stockholders. C) the company will sell more bonds in order to pay dividends to stockholders. D) the high profits indicate that common stockholders will get larger dividends than normal.
In order to use inflation targeting, a central bank must:
a. be independent of fiscal policy. b. be dependent on fiscal policy. c. focus on money supply. d. focus on unemployment. e. focus on stable exchange rates.
Compare and contrast the effects of an expansionary monetary policy and a contractionary monetary policy in the open economy.
What will be an ideal response?
A firm's average total cost is minimized at $5/unit when it produces 10 units. What is the marginal cost when the firm produces 10 units?
A. Greater than $5/unit B. $5/unit C. Less than $5/unit D. $10/unit