Suppose the Value of the CPI Is 1

question 31

Multiple Choice

Suppose the value of the CPI is 1.100 in year one, 1.210 in year two, and 1.331 in year three.Assume also that the price of computers increases by 3% between year one and year two, and by another 3% between year two and year three.The price level is increasing, the inflation rate is _______, and the relative price of computers is _________.

• A)increasing; increasing
• B)constant; increasing
• C)constant; decreasing
• D)increasing; decreasing

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Definitions:

Krafft-Ebing

Refers to Richard von Krafft-Ebing, a 19th-century Austrian psychiatrist known for his work on sexual psychopathology.

Skepticism

A philosophical approach that questions the validity or authenticity of something purported to be factual.

Sexual Response Cycle

The sequence of changes that occur in the body with increased sexual arousal, orgasm, and the return to the unaroused state, noted by William Masters and Virginia Johnson.