When comparing the annual inflation rate in the United States based on the CPI with the annual inflation rate based on the PCE price index, the data show that the
A) CPI measure tends to exceed the PCE price index measure.
B) PCE price index measure tends to exceed the CPI measure.
C) CPI measure and the PCE price index measure are equal.
D) CPI measure and PCE price index measure move in opposite directions.
E) CPI deflator and PCE price index cannot be compared because they measure prices of different baskets of goods and services.
A
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If one day the dollar is trading at 1.00 euro per dollar and the next day the exchange rate is 0.88 euros per dollar, one possible factor that might have led to this change is
A) an increase in the U.S. interest rate. B) a decrease in the European interest rate. C) the Fed buying dollars. D) the Fed selling dollars. E) an increase in the expected future exchange rate.
Examples of public goods include national defense, police, and the U.S. Postal Service
a. True b. False Indicate whether the statement is true or false