A) The base year is always the first year among the years for which computations are being made.
B) It is necessary to designate a base year only in the simplest case of two goods; in more realistic cases, it is not necessary to designate a base year.
C) The value of the consumer price index is always 100 in the base year.
D) The base year is always the year in which the cost of the basket was highest among the years for which computations are being made.
F) A) and B)
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A) monitor changes in the level of wholesale prices in the economy.
B) monitor changes in the cost of living over time.
C) monitor changes in the level of real GDP over time.
D) monitor changes in the stock market.
F) A) and C)
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The price of a 1950 ...View Answer
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A) The CPI was 100 in 2003, 110 in 2004, and 105 in 2005.
B) The CPI was 100 in 2003, 120 in 2004, and 135 in 2005.
C) The CPI was 100 in 2003, 105 in 2004, and 130 in 2005.
D) The CPI was 100 in 2003, 90 in 2004, and 88 in 2005.
F) B) and C)
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A) a process of adjusting the nominal interest rate so that it is equal to the real interest rate.
B) using a law or contract to automatically correct a dollar amount for the effects of inflation.
C) using a price index to deflate dollar values.
D) an adjustment made by the Bureau of Labor Statistics to the CPI so that the index is in line with the GDP deflator.
F) All of the above
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