An example of the quality change bias, and not a new goods bias, in the calculation of the CPI is a price increase in
A) Coke versus Pepsi.
B) DVDs purchased on Craigslist, an online classified website.
C) a 2013 GPS unit versus a 2008 GPS unit.
D) etexts versus used books .
E) pants purchased by a first-time shopper at Aeropostale.
C
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Which of the following is a problem in pursuing monetary policy?
A) The lag between a change in the quantity of money and its effect on economic activity may be long. B) The Fed must reveal to the public anytime the Fed changes its policy. C) Monetary policy must be approved by the Congress. D) The Fed cannot control the federal funds rate. E) None of the above answers is correct.
When the price elasticity of demand is small in magnitude, a _____ increase in the price leads to a _____ reduction in the amount purchased and the demand curve is relatively ____.
A. slight; substantial; steep B. slight; slight; flat C. large; slight; steep D. slight; substantial; flat
Mike, a U.S. citizen, buys $1,000 worth of olives from Greece. By itself this purchase
a. increases U.S. imports by $1,000 and increases U.S. net exports by $1,000. b. increases U.S. imports by $1,000 and decreases U.S. net exports by $1,000. c. increases U.S. exports by $1,000 and increases U.S. net exports by $1,000. d. increases U.S. exports by $1,000 and decreases U.S. net exports by $1,000.
When the text refers to rational self-interest, it means
A) your looking out for what is best for you as an individual. B) your focus on your own contributions to society. C) behavior that makes society better off. D) behavior that helps your employer earn higher profits.