The biases in the CPI are
A) not important since they are so small.
B) important only to economists, not the real world.
C) important since they effect nearly 1/3 of federal government spending.
D) not important although they are large.
C
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Figure 4.3 illustrates the demand for tacos. Assume that tacos and beer are complements. An increase in the price of beer would bring about a movement from
A) point a to point b. B) point c to point b. C) D2 to D1. D) D0 to D2.
Assume Mimi's budget constraint is shown in the graph shown. If earrings cost $7, then hairbands must cost:
A. $3.50.
B. $7.
C. $5.25.
D. $4.
Of the methods commonly employed to measure poverty and inequality, which offers the most widely used, but also the most misleading, statistic?
a. purchasing power parity b. poverty level c. average income d. cost of living
The effect of a shift in the aggregate demand curve due to an increase in consumer confidence will be:
A. a decrease in prices only in the long run; output will remain the same. B. an increase in both prices and output in the short run. C. a decrease in both prices and output in the short run. D. an increase in output only in the long run; prices will remain the same.