At the beginning of a year, decision makers expect the general level of prices to increase at a 3 percent annual rate. The CPI increases from 150 to 154.5 during the year; this is an example of
a. an inflation rate that is equal to 4.5 percent.
b. an unanticipated increase in the general level of prices.
c. an increase in the general level of prices that was accurately anticipated.
d. an inflation rate that is less than what people anticipated.
C
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Suppose inter-city bus travel is a substitute for transportation by train. Which of the following could then be TRUE?
A) The cross elasticity between bus and train travel could equal 0.65. B) The cross elasticity between bus and train travel could equal 1.0. C) The cross elasticity between bus and train travel could equal 1.25. D) All of the above could be true.
"Knowing your customer" means:
A) knowing what factors affect customer choices. B) knowing the names of customers. C) knowing whether something is a fad or a fashion. D) knowing that people do not believe advertising. E) having an understanding of why price goes up or down.