Answer the following statements true (T) or false (F)
1. The CPI measures price changes for only about two-thirds of all spending.
2. The GDP Implicit Price Defoliator is the broadest index of price changes.
3. The PPI is an index of the price level of aggregate output.
4. Check able deposits are counted as part of the U.S. money supply.
5. Savings deposits are not counted as part of the M1 measure of the U.S. money supply.
1. TRUE
2. TRUE
3. FALSE
4. TRUE
5. TRUE
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Identify the correct statement
a. It is absolutely compulsory for the government to earn a profitable return on the money it earns by selling bonds. b. When government borrowing rises, interest rates decline, thereby driving up private investment. c. When interest rates rise, fewer number of corporations offer new bonds to raise investment funds. d. An increase in interest rate reduces the cost of borrowing by the firms. e. When interest rates fall, the firm's cost of raising funds through bonds increases.
After John's income rose by 8 percent, the amount of chicken he consumed fell by 2 percent. This means that
a. his income elasticity for chicken is positive b. chicken is a normal good for John c. his demand curve for chicken shifted to the left d. his demand curve for chicken shifted to the right e. John is spending more of his income on chicken than before