Possible sources of an upward bias in the CPI include the
a. quantity adjustment bias.
b. substitution bias.
c. new products bias.
d. Both b and c
e. All of the above
D
You might also like to view...
Explain why it may make sense for the United States, Japan, and Europe to allow their mutual exchange rate to float?
What will be an ideal response?
The wholesale price of cranberries in the market is currently $0.83/lb. The quantity supplied at this price is 90,000 pounds. The quantity demanded is 95,000 pounds. In this case, there is:
a. Excess supply in the market and this is a signal for sellers to decrease price b. Excess supply in the market and this is a signal for suppliers to increase price c. Excess demand in the market and this is a signal for consumers to buy less d. Excess demand in the market and this is a signal for consumers to buy more e. The market is in equilibrium
Many developing countries face a balance of payments constraint because:
A. they fail to implement exchange rate policy correctly. B. they hold too few international reserves. C. they hold too many international reserves. D. the IMF forces them to adopt policies that are counterproductive.
A potential negative effect of advertising for society is that it can:
A. be self-canceling and contribute to economic inefficiency. B. lower barriers to entry and undermine profits in the industry. C. reduce mutual interdependence and increase competition. D. be the major cause of price wars among firms in the industry.