The Federal Reserve began paying interest on reserves in 2008

If new firms enter a perfectly competitive industry, the market supply

A) does not change. B) becomes more price elastic. C) becomes more price inelastic. D) increases. E) decreases because each firm produces less than before the entry.

The Bureau of Labor Statistics has taken several steps to reduce the bias in the consumer price index. Which of the following is not one of the steps taken to reduce the bias?

A) updating the market basket every two years, rather than every 10 years B) using statistical methods to reduce the size of the quality bias C) conducting a point-of-purchase survey to track where consumers actually make their purchases D) incorporating substitutions by consumers when prices of specific products rise rapidly