Suppose the Consumer Price Index (CPI) increased by 5 percent over each of the last 5 years while the GDP price index increased by 12 percent annually. Which of the following reasons could explain this difference?
a. Police unions across the country agreed to substantial salary cuts.
b. Import good prices increased relative to domestic good prices.
c. The price of used automobiles increased substantially relative to the prices of other goods.
d. The price of fighter planes dropped due to increased competition in the aerospace industry.
e. The price of investment goods purchased by businesses increased substantially relative to the prices of all other goods.
E
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Figure 33-8
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In Figure 33-8, the aggregate supply curve is shifting inward as we move from
A. A to C. B. C to E. C. A to B. D. D to C.
When the Bureau of labor Statistics makes seasonal adjustments in the labor force data, what is it likely to do with the number of people in the labor force during the month of June?
A) Lower the number each year. B) Raise the number each year. C) Lower the number about as often as it raises the number in the long run. D) Multiply the number by the labor force participation rate.
In 2012 Nike reduced the price of its running shoes by 20 percent. As a result, the substitution effect caused
A) the demand for Nike shoes to increase. B) people to switch from Adidas shoes and buy more Nikes. C) the relative price of Nikes to increase. D) the demand curve for Nikes to shift rightward.
If the price increases by 20 percent and the quantity supplied increases by 40 percent, what does the elasticity of supply equal?
What will be an ideal response?