Which of the following statements about the composition of price indices is NOT true?
A) The Paasche index is calculated with current-year prices.
B) The Paasche index is calculated with base-year quantities for the bundle.
C) The Laspeyres index is calculated with current-year prices.
D) The Laspeyres index is calculated with base-year quantities for the bundle.
B
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How is the effect of expansionary monetary policy depicted in an aggregate supply-aggregate demand graph?
A) The aggregate demand curve shifts rightward. B) The aggregate supply curve shifts leftward. C) The equilibrium level of income increases, but neither curve shifts. D) The aggregate supply curve shifts rightward.
Purposeful behavior suggests that:
A. everyone will make identical choices. B. resource availability exceeds economic wants. C. individuals may make different choices because of different desired outcomes. D. an individual's economic goals cannot involve trade-offs.