From 2015 to 2016, the overall price level rose from 200 to 220. Over the same period, tuition rates at the local community college rose from $100 to $115 per credit hour. What can be concluded from the rise in tuition relative to overall inflation?
a. Tuition rates increased at the same rate as inflation.
b. Tuition rates increased at a slower rate than inflation.
c. Tuition rates increased at a faster rate than inflation.
d. Tuition rates and inflation cannot be compared with the numbers given.
Answer: c. Tuition rates increased at a faster rate than inflation.
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When the credit demand curve is relatively flat:
A) the quantity of credit demanded is relatively sensitive to changes in the real interest rates. B) the quantity of credit demanded is relatively sensitive to changes in the taxation rates. C) the quantity of credit demanded is not responsive to changes in the taxation rates. D) the quantity of credit demanded is not responsive to changes in the real interest rate.
Which of the following factors weakens the case for private-sector provision of goods and services as opposed to public-sector provision?
a. weak incentives for operational efficiency b. rent-seeking c. the shortsightedness effect d. externalities