When the cost of the CPI market basket increases from one year to the next, we know that
A) on the average, current prices are less than past year prices.
B) the quantities of the goods and services contained in the CPI market basket have increased on the average.
C) the prices of the goods and services contained in the CPI market basket have increased on the average.
D) on the average, current prices are below base year prices.
E) either the quantities of the goods and services contained in the CPI market basket have increased on the average and/or the prices of the goods and services contained in the CPI market basket have increased on the average.
C
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Because of the choices people make in the pursuit of profit, new growth theory argues that
A) technology growth slows down in the long-run. B) population growth increases will bring real GDP per person back to subsistence level. C) the capital stock experiences diminishing returns. D) the economy can enjoy persisting economic growth.
If the price of milk increased by 5 percent because of an increase in the demand for milk, and the quantity of milk supplied increased by 7 percent
A) the supply curve of milk has shifted rightward. B) the price elasticity of supply of milk is greater than one. C) milk is more of a luxury than a necessity. D) milk is more of a necessity than a luxury.