The consumer price index overestimates inflation because it
A. allows consumers to move along a given indifference curve from one year to the next.
B. uses the second year's market basket as the base rather than the first year's basket.
C. measures the cost of a market basket in the second year that has too many units of the most inflated items.
D. compares prices of what consumers actually buy rather than a fixed basket of goods.
Answer: C
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In developing countries, exchange rates tend to be
A) floating with some government intervention. B) pegged. C) hard to tell from the data. D) run by currency boards. E) flexible.
During the late 1800s and early 1900s,
(a) American society clearly recognized the value of labor in the profit process. (b) U.S. legislation and courts of law appeared hostile to the interests of organized working employees. (c) society, at large, generally favored the efforts of workers to combine into unions to negotiate with employers. (d) organized labor had a stable and respected place in politics.