Core inflation is measured because the prices of:
A. nondurable goods fluctuate more frequently than the prices of durable goods; therefore, removing them from the basket prevents potential distortion.
B. durable goods fluctuate more frequently than the prices of nondurable goods; therefore, removing them from the basket prevents potential distortion.
C. food and energy costs fluctuate frequently and can distort actual changes in the cost of living.
D. retail consumption items fluctuate frequently and can distort actual changes in the cost of living.
Answer: C
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Most U.S. firms face:
A. perfect competition. B. some degree of competition. C. market power resting in a few large firms in every industry. D. no competition at all.
A monopoly:
A. is a price taker. B. faces competition from other firms producing close substitutes. C. restricts its output. D. sets a low price by controlling the level of output.