The consumer price index is
A) an average of the prices of the goods and services purchased by the typical family.
B) the cost of a market basket of goods and services typically consumed in a base year.
C) the cost of a market basket of goods and services typically consumed in the current year.
D) an average of the prices of new final goods and services produced in the economy over a period of time.
A
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Which of the following is not a consequence of deflation?
A. Deflation causes uncertainty about the future. B. The threat of deflation can make people reluctant to borrow for long periods. C. Deflation causes the real value of money to fall. D. Firms may be reluctant to undertake investments for fear that the prices at which they can sell their output will drop.
In the Keynesian framework, as long as output is ________ the equilibrium level, unplanned inventory investment will remain positive and firms will continue to ________ production
A) below; lower B) above; lower C) below; raise D) above; raise