The Price of a Taco Was $0

question 1

Multiple Choice

The price of a taco was $0.29 in 1970 and $1.09 in 2017. The CPI was 38.8 in 1970 and 172.2 in 2017. The 2017 price of a taco in 1970 dollars is:

• A) $0.25.
• B) $0.29.
• C) $1.09.
• D) $4.84.

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Definitions:

Cyclical Unemployment

This refers to unemployment that occurs due to fluctuations in the economy, often increasing during a recession and decreasing during an economic expansion.

Unemployment Rate

The fraction of the working population that is not employed and is on the lookout for work.

Recovery

The phase of the business cycle in which economic activity picks up and the economy begins to grow after a recession.

Business Cycle

The fluctuations in economic activity that an economy experiences over a period of time, including periods of expansion and contraction.