Suppose that last year, the price of strawberries was $2 and the price of milk was $1. This year, the price of milk is $2 and the price of strawberries is $1. Which of the following statements is true?
A) The CPI does not change because the change in the two prices is the same.
B) The CPI increases because milk is more expensive.
C) The CPI decreases because strawberries are cheaper.
D) The CPI might increase or decrease depending on the quantities in the CPI market basket.
E) The change in the CPI depends how the market basket changed between the two years.
D
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When a government subsidizes the sale of milk, cooperative surplus ________ and society gets ________
A) increases; richer B) increases; poorer C) decreases; richer D) decreases; poorer
In the market for euros, the supply of euros (€) is
A) downward sloping, because lower dollar prices of euros mean that U.S. goods are cheaper to Europeans. B) downward sloping, because higher dollar prices of euros mean that U.S. goods are cheaper to Europeans. C) upward sloping, because higher dollar prices of euros means that U.S. goods are cheaper to Europeans. D) upward sloping, because lower dollar prices of euros means that U.S. goods are cheaper to Europeans.