Consider a Small Economy in Which Consumers Buy Only Two

question 71

Multiple Choice

Consider a small economy in which consumers buy only two goods -- apples and pears.In order to compute the consumer price index for this economy for two or more consecutive years,we assume that

• A)the number of apples bought by the typical consumer is equal to the number of pears bought by the typical consumer in each year.
• B)neither the number of apples bought by the typical consumer, nor the number of pears bought by the typical consumer, changes from year to year.
• C)the percentage change in the price of applies is equal to the percentage change in the price of pears from year to year.
• D)All of the above are correct.

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Definitions:

Unidentified Principal

In agency law, this refers to a situation where an agent acts on behalf of a principal who is not disclosed to the third party at the time of the transaction.

Liability

The state of being legally responsible for something, typically involving financial or legal obligations that result from one's actions or agreements.

Contractual Authority

The power granted to an individual or entity to enter into legally binding contracts on behalf of another person or organization.

Liable

Being legally responsible for something, typically involving a financial or legal obligation.