Which of the Following Statements About Price Indexes and the Cost

question 137

Multiple Choice

Which of the following statements about price indexes and the cost of living is correct?

• A) As long as the overstatement of actual price increases remains below the unemployment rate this measurement bias is mostly irrelevant.
• B) If the overstatement of actual price increases continues, the Social Security system is likely to go bankrupt within the next five years.
• C) A one percent overstatement of actual price increases has a multi- billion impact in Social Security budgets.
• D) Because the overstatement of actual price increases is always smaller than the growth rate of real GDP this measurement bias is mostly irrelevant.

Recognize the components of GDP (consumption, investment, government purchases, net exports) and their impact on the economy.

Identify what is included and excluded in GDP calculations.

Comprehend the concept of net investment and its relation to gross investment and depreciation.

Understand how inflation and deflation impact GDP and real GDP.

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Definitions:

UCC

The Uniform Commercial Code, a comprehensive set of laws governing commercial transactions in the United States, designed to standardize and simplify the laws across states.

Damages

Monetary compensation awarded by a court to a person who has suffered loss or harm due to the unlawful act or negligence of another.

Breach

The violation or infringement of a law, duty, or other form of agreement.

Contractual Provision

Specific clauses or terms included within a contract that dictate the obligations, rights, or conditions for the involved parties.