What are the three stages of constructing the CPI?
What will be an ideal response?
The first stage is to select the CPI market basket. The market basket is determined by surveying the spending habits of consumers by conducting a Consumer Expenditure Survey. The second stage is to check the prices of about 80,000 goods and services in 30 metropolitan areas. This checking is done on a monthly basis. The third stage is to calculate the CPI itself. To calculate the CPI, a period of time is selected as the base reference period and the cost of the CPI market basket using the prices from that period is computed. Then the CPI in any other month equals 100 times the quotient of the cost of the market basket using current-period prices divided by the cost of the market basket in the reference base period.
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Everything else held constant, if aggregate output is to the ________ of the IS curve, then there is an excess supply of goods which will cause aggregate output to ________
A) right; fall B) right; rise C) left; fall D) left; rise
Which of the following is not an advantage of starting a new business as a sole proprietorship?
A) separation of ownership and business liability B) limited control over the operation of the business C) the initial cost in setting up the business D) possibility of double taxation