What is Consumer Price Index (CPI) ?
A. CPI is a tool used to measure the average price level of all final goods and services produced.
B. CPI is the measurement of the price of a fixed basket of goods and services relative to the price of that same basket in some base year.
C. CPI is the measurement of the amount of money that it takes to produce a fixed level of utility.
D. None of the above.
B. CPI is the measurement of the price of a fixed basket of goods and services relative to the price of that same basket in some base year.
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Forecasting the future path of real GDP by exploiting past statistical relationships
A) is never very reliable. B) can be accomplished by the construction and use of an index of leading variables. C) can be accomplished by the construction and use of an index of lagging variables. D) can be accomplished by the construction and use of an index of coincident variables.
How much is induced consumption when disposable income is $400 billion?
A. 0
B. $100 billion
C. $200 billion
D. $300 billion