If the consumer price index (CPI) is 160 one year and 175 the next, the annual rate of inflation as measured by the CPI is approximately _____.
a. 4.5 percent
b. 8.6 percent
c. 9.4 percent
d. 15 percent
e. 175 percent
QUESTION 2Economists define a labor market with only one buyer to be:
a. a monopoly.
b. an oligopoly.
c. a monopsony.
d. perfectly competitive.
e. backward bending.
QUESTION 3Higher unemployment benefits funded by higher taxes on earnings would:
a. decrease aggregate supply in an economy.
b. increase the supply of labor in an economy.
c. increase the price level in an economy.
d. decrease aggregate demand in an economy.
e. increase the opportunity cost of leisure.
QUESTION 4The GDP price index:
a. measures the average price of final goods and services produced in an economy.
b. measures the quality of goods produced in an economy.
c. is derived using the prices of only imported and exported goods and services.
d. is derived using the implicit prices of goods and services produced by the government.
e. measures the value of all intermediate goods and services sold in an economy.
QUESTION 5Which of the following statements is true about monopsony?
a. c and e.
b. c, d, and e.
c. Monopsonists exercise complete buying power.
d. Monopsonists maximize profit by setting MRP = MFC.
e. Monopsonists face the whole labor supply curve.
QUESTION 6People will be likely to spend a higher percentage of any additional income when _____.
a. they believe that the increase is permanent
b. they believe that the increase is temporary
c. the increase is large
d. the increase is small
e. interest rates on savings accounts are rising
QUESTION 7To determine the consumer price index (CPI), _____.
a. the values of the current market basket at current and base-year prices need to be known
b. the values of the base-year market basket at current and base-year prices need to be known
c. the values of the current market basket at current prices and the base-year market basket at base-year prices need to be known
d. only the current market basket at base-year prices needs to be known
e. only the current market basket at current prices needs to be known
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