You using a Laspeyres (fixed-weight )price index to compare price changes over time, and the index is based on consumption bundles from 2005 when energy costs were lower and housing costs were higher. Your results are likely to:
A) Overstate changes in the cost of living because the weight assigned to energy is too small.
B) Overstate changes in the cost of living because the weight assigned to energy is too large.
C) Understate changes in the cost of living because the weight assigned to housing is too small.
D) Understate changes in the cost of living because the weigh assigned to housing is too large.
B
Economics
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Discuss the BRAC model and evaluate its performance in achieving the goals of economic development? Can this model be replicated in other countries?
What will be an ideal response?
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Compared to IACs, LDCs are often characterized by:
a. lower adult literacy. b. lower per capita energy consumption. c. lower life expectancy. d. All of the answers are correct.
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