To the extent that the CPI does not accurately measure the true price level,
a. the BLS will change the underlying market basket of goods
b. it is useless
c. it exaggerates the true cost of living
d. it results in underindexation of social security payments
e. it underestimates the true cost of living
C
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The proposition that states that as output increases for one good in an economy that is on its production possibilities curve, the cost of additional units of the good on the horizontal axis will be greater and greater is the:
A) law of absolute advantage. B) law of increasing opportunity cost. C) law of policy ineffectiveness. D) law of demand.
Underwriting spreads on equity issues are much __________ than on debt issues because stock prices are so __________ relative to bond prices
A) smaller; steady B) smaller; volatile C) larger; steady D) larger; volatile