Which of the following is a limitation of using arithmetic averages to calculate growth rates?
A) Arithmetic averages do not capture the exponential nature of growth and thus are not apt for long-run prediction.
B) Arithmetic averages cannot be used in case of negative growth.
C) Arithmetic averages are difficult to calculate.
D) The calculation of growth using arithmetic averages requires more data than other methods.
A
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Which of the following statements is correct?
a. The CPI can be used to compare dollar figures from different points in time. b. The percentage change in the CPI is a measure of the inflation rate, but the percentage change in the GDP deflator is not a measure of the inflation rate. c. Compared to the consumer price index (CPI), the GDP deflator is the more common gauge of inflation. d. The GDP deflator better reflects the goods and services bought by consumers than does the CPI.
All of the following would be considered explicit costs of operating a business except
A) rent paid to a landlord. B) bonuses paid to employees. C) a normal rate of return for investors. D) corporate income taxes.