Answer the following statements true (T) or false (F)
1. If one city has a higher CPI than another city, the city with the higher CPI must have a higher cost of living.
2. COLA is a form of indexation.
3. Only wages or income can be indexed to the CPI.
4. Indexation is a good means of reducing inflation.
5. The value or purchasing power of the dollar can be obtained by dividing $1 by the CPI.
1. FALSE
2. TRUE
3. FALSE
4. FALSE
5. TRUE
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The corn market is perfectly competitive, with thousands of corn farmers. In the 2000s, the price of corn soared so that new farmers entered the corn market
Initially, entry ________ the economic profit of the initial corn farmers and in the long run the initial corn farmers ________. A) increased; made an even greater economic profit than initially B) decreased; made zero economic profit C) increased; made zero economic profit D) decreased; incurred an economic loss E) increased; made an economic profit
The two topics of primary concern in macroeconomics are:
A. short-run fluctuations in output and employment and long-run economic growth. B. unemployment and wage rates in labor markets. C. monopoly power of corporations and small business profitability. D. oil prices and housing markets.