Consider a small economy in which consumers buy only two goods: apples and pears. In order to compute the consumer price index for this economy for two or more consecutive years, we assume that
a. the number of apples bought by the typical consumer is equal to the number of pears bought by the typical consumer in each year.
b. neither the number of apples nor the number of pears bought by the typical consumer changes from year to year.
c. the percentage change in the price of apples is equal to the percentage change in the price of pears from year to year.
d. neither the price of apples nor the price of pears changes from year to year.
b
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LDC is an acronym for locally-developed country
Indicate whether the statement is true or false
When there is a current account deficit, it is likely that
A) exports exceed imports for the country. B) the country is an exporter of capital. C) the financial account has a surplus. D) the country has a budget surplus.