Answer the following questions true (T) or false (F)
1. If the CPI falls from 142 to 140 between two consecutive years, this implies that prices fell by 2% between those two years.
2. The producer price index tracks the prices firms receive for goods and services at all stages of production.
3. Nominal income is equal to real income if the CPI is less than 100.
1. FALSE
2. TRUE
3. FALSE
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Assume that Ford Motor Company engineers achieve a revolutionary technological breakthrough in the production process of automobiles. Which of the following is expected to take place?
a. A movement up along the existing supply curve for Ford automobiles b. The supply of Ford automobiles will remain unchanged c. An inward shift of the supply curve for Ford automobiles d. A downward movement along an existing supply curve for Ford automobiles e. An outward shift of the supply curve for Ford automobiles
One reason why, in the last four decades, the number of new auto makers in the world has been very small compared to the past is that
A) the automobile cannot be improved upon in any way by new producers. B) new auto makers cannot obtain necessary inputs to produce new cars. C) governments restrict who can produce automobiles. D) new producers cannot match the economies of scale of existing auto makers.