Which of the following statements about the composition of price indices is NOT true?
A) The Paasche index is calculated with current-year prices.
B) The Paasche index is calculated with base-year quantities for the bundle.
C) The Laspeyres index is calculated with current-year prices.
D) The Laspeyres index is calculated with base-year quantities for the bundle.
B
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Refer to Monopoly Problem. This monopoly will receive producer surplus of
Consider a monopoly with constant marginal costs of $20. Consumers in the market for this monopoly’s product have demand of Q = 100 - 2P. a. $0 b. $225 c. $450 d. $900
The most important, most convenient, and most flexible way in which the Federal Reserve affects the supply of bank reserves is through:
A. conducting open-market operations. B. changing interest rates. C. changing bank reserve requirement ratios. D. changing the Federal Reserve discount rate.
Suppose that a 15 percent decrease in price leads to an increase in the quantity demanded of 10 percent,
A. demand is elastic. B. demand is inelastic. C. elasticity of demand is unitary. D. None of the above is correct.
If a country is trying to recover from a recent recession, it is unlikely their government officials will decide to ________ because it would ________
A) raise interest rates; decrease aggregate demand B) institute a tax cut; increase aggregate demand C) raise interest rates; increase aggregate demand D) increase taxes; increase aggregate demand E) lower interest rates; decrease aggregate demand