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Illustrate an example of Consumer Price Index
For instance, if we spend twice as much on apples as on pears, apples would have twice the weight in basket. The precise details of composition of basket and how CPI is computed are complicated and vary somewhat between nations. Figure below displays CPI for Germany after reunification starting at January 1991. This data has 2005 as reference year. This means that CPI is constructed in such a way that CPI is exactly equal to 100 on average during 2005.
The Pigou effect: A) suggests that as prices fall and real money balances rise, consumers should feel less wealthy and spend less. B) suggests that as prices fall and real mo
if the price elasticity of demand is computed for two products, and product A measures .79 , and product B measures 1.6 , then ? a. product A is more price elastic than product
Consumer Equilibrium: According to our assumption for 'x' units consumption of the commodity, gross utility obtained by the consumer is U(x).But for this, the consumer must sp
A budget deficit is defined as: A. accumulated surpluses minus accumulated deficits. B. a shortfall of revenues compared to expenditures. C. accumulated deficits minus accumulated
Describe the meaning of word -Investment When we use the word investment, we generally mean "gross investment". Essentially, gross investment comprises all finished goods which
Consider the following model of an economy that begins in a macro equilibrium,
acceptedcapital structure theories
Assume the residents of an economy spend all of their income on cauliflower, broccoli and carrots. In 2003 they buy100 heads of cauliflowers for Rs. 200; 50 bunch of broccoli f
Determine the present worth of a geometric gradient series with a cash flow of $50,000 in year 1 and increases of 6% each year through year 8. The interest rate is 10% per year.
Which of the following statements BEST describes the Metzler paradox? a. Tariffs improve the imposing nation's terms of trade. b. Export subsidies hinder the imposing nation's term
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