The Fed uses a "core" price index, one that excludes food and energy prices to measure inflation. It does so because
A) food and energy have inelastic demand curves and consumers will buy them regardless of their price.
B) it wants to avoid the blame for high gasoline prices causing inflation.
C) food and energy prices have wide swings that are not related to the causes of general inflation.
D) food and energy prices do not change all that much during the short run, so are irrelevant to the calculation of inflation.
Answer: C
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An accountant may amortize the expense of a durable good by dividing the total amount spent on the good by the number of years the good is expected to last. An economist may amortize the expense of a durable and never fully account for the total expense
Indicate whether the statement is true or false
When a firm is experiencing economies of scale:
A. Minimum efficient scale has been achieved B. Long-run average total cost is decreasing C. An increase in output is accompanied by a more-than-proportionate increase in long-run total cost D. A given percentage increase in output requires a more-than-proportionate increase in resources