In June 1960, the Price of Gasoline in the Midwest

question 30

Multiple Choice

In June 1960, the price of gasoline in the Midwest was $0.169 per gallon and the CPI was 29.6 with a base period of 1982 to 1984. What was the real price of gasoline per gallon in base period dollars?

• A)$0.571 per gallon
• B)$0.057 per gallon
• C)$0.05 per gallon
• D)$0.296 per gallon
• E)$0.169 per gallon

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Definitions:

Crowding out

A situation in economics where increased government spending displaces private sector spending, either through higher taxes, higher interest rates, or borrowing.

Government Expenditures

The spending by the government sector on goods and services, including public services and public investment.

Multiplier

An economic factor that quantifies the effect of a change in fiscal or monetary policy on the overall economy, such as how an increase in government spending can lead to a larger increase in national income.

Crowding out

A situation where increased government spending leads to reduced investment in the private sector due to higher interest rates or competition for resources.