Which of the following is an accurate statement about the price index?
a. It provides an equivalent measure of prices paid for goods and services over time.
b. It provides an efficient way to catalog the prices of goods and service for each year.
c. It provides a standard method to calculate the demand curve for each year.
d. It provides a necessary means to determine the supply curve over time.
a. It provides an equivalent measure of prices paid for goods and services over time.
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Suppose, with a given supply and demand curve, the market for guitars would clear at $500, but the current price of guitars is $700. Given the above information,
A) there is a shortage of guitars. B) there is a surplus of guitars. C) the market for guitars is fully coordinated. D) the quantity of guitars supplied equals the quantity demanded.
A closed economy is one in which
A) investment spending is zero. B) government spending is zero. C) there are no imports or exports. D) demand equals supply in every market.