The Consumer Price Index (CPI) differs from a chain-weighted price index in that the CPI:
A. requires calculation of GDP, while the chain-weighted index does not.
B. measures the costs of a typical fixed basket of goods over time, while the chain-weighted index does not.
C. allows for the goods consumed in an economy to change over time, while the chain-weighted index does not.
D. compares the prices of all goods in one year to the prices of all goods in other years.
Answer: B
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The calculation of real GDP allows us to
A) separate consumption and investment spending. B) adjust for underground economic activity. C) adjust for the change in the quality of output over time. D) compare national output across periods of time.
If economists wanted to measure the net gain in economic well-being to producers, they would refer to ______.
a. producer surplus b. consumer surplus c. market price d. deadweight loss
A characteristic of the market system is:
A. frequent use of price controls. B. low interest rates. C. extensive use of capital goods. D. frequent use of barter.
Which of the following would give the most importance to the goal of exchange rate stability?
A. The U.S. and Japan and other developed countries B. Emerging market countries where exports and imports are central to the structure of the economy C. Europe D. Large, closed economies