Suppose the CPI does indeed overstate the inflation rate. When the CPI increases by 5 percent and household incomes increase by 5 percent, we should conclude that real incomes of households have:
A. increased.
B. increased more slowly than has inflation.
C. stayed constant.
D. decreased.
Answer: C
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________ analysis by economists refers to the attempt to answer questions such as should a tax be imposed
A) Positive B) Negative C) Normative D) Investigative
Which of the following is the equation of exchange?
a. M – V = P – Q b. M + V = P – Q c. M ÷ V = P x Q d. M x V = P x Q
The benefit of a mixed strategy is
A. lower risks for both the players in the market. B. the element of consistency that baffles rivals. C. the element of surprise that baffles rivals. D. higher returns for both the players in the market.
Why is the pricing outcome of a perfectly competitive firm efficient in economic sense?
What will be an ideal response?