The Fed believes there are three advantages to using the personal consumption expenditures (PCE) price index instead of the CPI as a measure of inflation. These advantages include all of the following except
A) the PCE is a chain-type index as opposed to the market-basket approach used for the CPI, and the market-basket approach tends to overstate inflation.
B) the PCE includes the prices of more goods and services than the CPI, so it is a broader measure of inflation.
C) the PCE allows the Fed to better track historical trends in inflation than does the CPI because PCE values can be recalculated as new data becomes available.
D) the PCE includes the value of imported products purchased by consumers , whereas the CPI does not, and imports make up a growing portion of consumer purchases in the United States.
D
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Structural unemployment is
A) associated with the changing of jobs in a dynamic economy. B) associated with general downturns in the economy. C) associated with changes in technology that change required job skills. D) very short-term unemployment.
Which of the following is a key characteristic of economic freedom?
a. subsidies and regulations that favor business b. central planning c. reliance on open markets d. import quotas that protect domestic businesses from rivals