What is one way to adjust the CPI for substitution bias?
A) Use the Paasche index.
B) Use the Laspeyres index.
C) Multiply the Paasche Index and the Laspeyres index.
D) Take the geometric mean of the Paasche index and the Laspeyres index.
A
You might also like to view...
When determining interest rates, the loanable funds model is more useful when we are concerned with the determinants of the ________, and the money market model is more useful when we are concerned with the determinants of the ________
A) long-term real interest rate; short-term nominal interest rate B) short-term real interest rate; long-term nominal interest rate C) short-term real interest rate; short-term nominal interest rate D) long-term real interest rate; long-term nominal interest rate
Which of the following is included in the investment component of GDP?
a. spending on new residential construction and spending on stocks and bonds b. spending on new residential construction but not spending on stocks and bonds c. spending on stocks and bonds but not spending on new residential construction d. neither spending on stocks and bonds nor spending on new residential construction
In the above graph, what is the marginal rate of technical substitution at point D?
A. greater than 1.5 B. less than 2.5 C. less than 1.5 D. greater than 2.5
The money multiplier will be smaller when:
A. bank customers prefer to hold a bigger amount of their money as cash (instead of in their checking account). B. banks prefer to lend out 9 percent of their excess reserves instead of 90 percent. C. when the marginal propensity to save declines. D. when the reserve ratio decreases.