Suppose in year 1 the CPI is 90, in year 2 the CPI is 100, and in year 3 the CPI is 110. Then, inflation is
A) 11 percent between years 2 and 3.
B) 11 percent between years 1 and 2.
C) 100 percent in year 1.
D) 10 percent between years 2 and 3.
E) Both answers B and D are correct.
B
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Refer to Table 19-1. Fill in the missing values in the above table. Assume the Big Mac is selling for $4.79 in the United States. Explain whether the U.S
dollar is overvalued or undervalued relative to each of the other currencies and predict what will happen in the future to each exchange rate.
The free-rider problem is encountered when
A) someone benefits from the consumption of a public good without paying his or her full share. B) all individuals who consume a public good pay for it. C) all goods consumed and produced are private goods. D) all individuals are willing to pay for what they consume.