What is the difference between the Consumer Price Index and the Producer Price Index?
The CPI measures the cost of a basket of goods and services bought by consumers, and the PPI measures the cost of a basket of good and services bought by producers.
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When salaries are paid more frequently, the velocity of money speeds up because individuals hold more cash
a. True b. False Indicate whether the statement is true or false
Refer to Goods X and Y. Suppose the consumer is spending all of his income buying some of both goods. If the marginal value of X is greater than the relative price of X, how can the consumer improve his level of satisfaction?
Assume that good X is on the horizontal axis and good Y is on the vertical axis in the consumer-choice diagram. PX denotes the price of good X, PY is the price of good Y, and I is the consumer's income. Unless otherwise stated, the consumer's preferences are assumed to satisfy the standard assumptions. a. By purchasing more of both goods. b. By purchasing more of good X and less of good Y. c. By purchasing more of good Y and less of good X. d. The consumer cannot improve his level of satisfaction because he is at the optimum.