If the current year CPI is 140, then the price level has increased 40 percent since the base year
a. True
b. False
Indicate whether the statement is true or false
True
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The interest rate is the price borrowers pay to borrow money. Key interest rates are controlled by the Federal Reserve System. If the Federal Reserve acts to reduce interest rates, economists would expect the demand for money to
A. increase. B. decrease. C. not change. D. be influenced by the interest rate, but with an uncertain effect.
Under classical theory, wages and prices are assumed to be relatively flexible both upward and downward. Hence, the short-run aggregate supply curve returns relatively quickly to a position of long-run equilibrium
a. True b. False Indicate whether the statement is true or false
When economic rent exists
A. resources are allocated efficiently. B. the price is equal to the opportunity cost of the resources. C. price is the same as the discount rate. D. resources are allocated inefficiently.
The purchase of 500 shares of Honda stock by the California State Employees' Pension fund
A) is counted as consumption expenditure. B) is not counted as part of GDP. C) is counted as investment in the GDP accounts. D) is counted as part of export expenditure in the GDP accounts because Honda is a foreign firm. E) is counted as part of import expenditure in the GDP accounts because Honda is a foreign firm.