If consumers purchase fewer of those products that increase most in price and more of those products that decrease in price as compared to the CPI basket, then
A) changes in the CPI are unrelated to the true rate of inflation.
B) changes in the CPI understate the true rate of inflation.
C) changes in the CPI overstate the true rate of inflation.
D) changes in the CPI accurately reflect the true rate of inflation.
C
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If the demand for textbooks is inelastic, then a decrease in the price of textbooks will
a. increase total revenue of textbook sellers. b. decrease total revenue of textbook sellers. c. not change total revenue of textbook sellers. d. There is not enough information to answer this question.
The market in which the currency of one country is traded for the currency of another country is called
A. the futures market. B. the commodities market. C. the foreign exchange market. D. the international trade market.