The CPI includes the prices of
a. goods and services purchased by American consumers
b. goods and services purchased by all consumers (both foreign and domestic)
c. goods and services purchased by the government
d. investment goods purchased by businesses
e. exports purchased by foreign buyers
A
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Using a discount rate above the market interest rate to evaluate projects will
a. bias a decision toward going ahead with the project b. correct for distortions in capital markets c. have no impact on project evaluation d. bias a decision toward rejecting a project e. none of the above
Which of the following is accurate regarding income statistics?
a. Current annual income is also an accurate indicator of relative economic status for the same individual over a longer period such as a decade or lifetime. b. When there is substantial income mobility, one's current position in the income distribution will not be a very good indicator as to what one's position will be a few years in the future. c. Recent studies indicate that there is a strong positive relationship between the relative income position of a family and the relative income position of their children and grandchildren. d. Even though annual income data camouflage the fact, high-income earners generally maintain their status year after year, while those with low current incomes tend to stay poor year after year.