Recall the Application about the time involved in including cell phones in the calculation of the Consumer Price Index (CPI) to answer the following question(s).According to the Application, as new products are constantly invented and introduced on the market:
A. the bias in the CPI can be large.
B. the bias in the CPI tends to become smaller.
C. the bias in the CPI will eventually disappear.
D. the bias in the CPI will remain virtually unchanged.
Answer: A
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The European Union established a cap-and-trade system which was designed to
A) eliminate air pollution and greenhouse gases by the year 2020. B) reduce carbon dioxide emissions. C) remove all taxes from polluting industries. D) provide fast growing developing countries with the technology to reduce their carbon emissions.
The balance of payments includes all of the following accounts except
A) the national debt account. B) the financial account. C) the capital account. D) the current account.
When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Refer to the following indifference map for a consumer who has an income of $48 to spend on goods X and Y and the market prices of X and Y are both $4: Now suppose the price of good X increases to $12 while the price of good Y remains $4. Utility will be maximized on which indifference curve?
Now suppose the price of good X increases to $12 while the price of good Y remains $4. Utility will be maximized on which indifference curve?
A. I B. II C. III D. On an indifference curve below I