Suppose the inflation rate in Zlanaga has shown an upward trend during the last five years, increasing from 5 percent to 10 percent. To combat inflation, the central bank of the country is likely to:
a. lower the discount rate

The technique currently used to calculate the CPI implicitly assumes that over time consumers buy

A) relatively more of goods whose relative prices are rising. B) relatively less of goods whose relative prices are rising. C) the same relative quantities of goods as in a base year. D) goods and services whose quality improves at the rate of growth of real income.

If the price is $5 and the quantity demanded is 100 units, then at a price of $10, the quantity demanded will be

A) less than or equal to 100 units. B) greater than or equal to 100 units. C) less than or equal to 1000 units. D) equal to 100 units.