In a price system, changes in prices
A) make it difficult for the system to function well.
B) imply that people have made mistakes in the past.
C) signal to everyone in the system what goods are relatively more or less scarce.
D) signal to policy makers what goods should and should not be taxed more.
C
You might also like to view...
During which of the following decades was the debt-to-GDP ratio generally highest in the United States?
A) 1930s B) 1940s C) 1960s D) 1980s E) 1990s
One of the widely acknowledged problems with using the consumer price index as a measure of the cost of living is that the CPI
a. fails to measure all changes in the quality of goods. b. displays a housing bias. c. accounts for changes in prices of some goods, but prices of certain goods are assumed to remain constant. d. All of the above are correct.