If a New and Better Good Replaced an Older and Less

question 340

Multiple Choice

If a new and better good replaced an older and less expensive good, then the price level measured by the CPI .

• A) is higher than the actual price level
• B) might be either higher or lower than the actual price
• C) is the same as the actual price level because it measures the prices of the actual goods.
• D) is lower than the actual price level

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Definitions:

Labor Force

The total number of people who are employed and those actively seeking employment in an economy.

Bowed Out

A term used to describe the shape of a production possibilities frontier that demonstrates increasing opportunity costs.

Resources

This term refers to assets, materials, and components that can be used to produce goods and services.

Productive Inputs

Resources used in the production of goods and services, including labor, capital, and raw materials.