For purposes of calculating the CPI, the food & beverages category of consumer spending includes the cost of
a. food away from home.
b. alcoholic beverages.
c. both food away from home and alcoholic beverages.
d. neither food away from home nor alcoholic beverages because these are included in the recreation category of consumer spending.
c
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Which of the following most clearly illustrates the concept of derived demand?
a. An increase in the price of steak causes the demand for poultry to increase. b. An increase in the demand for new houses leads to an increase in the demand for construction workers. c. An increase in consumer income leads to an increase in the demand for services provided by the government. d. An increase in the demand for new cars causes the demand for used automobiles to rise.
Consumption spending that is independent of the level of disposable income is known as:
a. marginal consumption. b. transitory consumption. c. permanent consumption. d. relative consumption. e. autonomous consumption.