A major element of the concepts of inflation and deflation is
A) the idea that price changes are measured daily.
B) their dependence on average rather than individual prices.
C) the requirement that ALL prices must be moving in the same direction.
D) each household's willingness to report what they pay for goods and services each month.
B
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Most economists reject the theory of rational expectations because
a. expectations adjust very quickly. b. workers receive wage increases in advance of inflation. c. the short-run aggregate supply curve is vertical. d. labor contracts tend to embody past inflation rates.
In a market, a distortion does not exist if
A. the social marginal benefit is less than the social marginal cost. B. the social marginal benefit is equal to the social marginal cost. C. the social marginal benefit is greater than the social marginal cost. D. the private marginal benefit is greater than the social marginal benefit.