The Fed Uses a "Core" Price Index,one That Excludes Food

question 147

Multiple Choice

The Fed uses a "core" price index,one that excludes food and energy prices to measure inflation.It does so because

• A)food and energy have inelastic demand curves and consumers will buy them regardless of their price.
• B)it wants to avoid the blame for high gasoline prices causing inflation.
• C)food and energy prices have wide swings that are not related to the causes of general inflation.
• D)food and energy prices do not change all that much during the short run,so are irrelevant to the calculation of inflation.

Understand differences in linguistic abilities between humans and non-human animals.

Understand the conditions and outcomes of operating within a perfectly competitive market.

Analyze how changes in market demand and supply affect firm profits in perfect competition.

Recognize the relationship between marginal cost (MC), marginal revenue (MR), average total cost (ATC), and profit maximization.

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Definitions:

Underapplied

A term often used in cost accounting to denote when the allocated overhead or indirect costs are less than the actual overhead incurred.

Raw Materials

Basic materials used in the production process that are transformed into finished goods.

Storeroom

A room or space where supplies, materials, or equipment are kept for future use.

Credit

An accounting entry that either increases a liability or equity account, or decreases an asset or expense account. It is positioned on the right side of an accounting ledger.