A price index measures:
A. the average price of a given class of goods or services relative to the price of the same goods and services in a base year.
B. the price of specific good or service.
C. only the prices that change.
D. the change in the price of a specific good or service.
Answer: A
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If all inputs are increased by 5 percent and output increases by 8 percent, then the
A) firm experiences constant returns to scale. B) long-run average cost curve slopes downward. C) long-run average cost curve shifts downward. D) firm experiences diseconomies of scale.
If a country is industrialized then prolonged periods of negative growth in GNP per capita should not be a cause for concern
Indicate whether the statement is true or false
One reason the housing bubble occurred is because:
A. the recency effect caused homes to typically be undervalued. B. the herd instinct caused everyone to believe home prices would continue to fall. C. securitization removed much of the risk from the sellers of subprime mortgages. D. All of these statements are true.
When nations trade the result would most likely be:
A. increase in total production, which can benefit every nation involved. B. decrease in total production across nations but increases it for some. C. decrease in total production across all nations but benefits every nation because they are individually more productive. D. increase in total production, which would benefit only the wealthier nation.