Consider a Small Economy in Which Consumers Buy Only Two

question 186

Multiple Choice

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

• A)the percentage change in the price of pretzels is equal to the percentage change in the price of cookies from year to year.
• B)the number of pretzels bought by the typical consumer is equal to the number of cookies bought by the typical consumer in each year.
• C)neither the number of pretzels nor the number of cookies bought by the typical consumer changes from year to year.
• D)neither the price of pretzels nor the price of cookies changes from year to year.

---

Definitions:

Individual Profile Sheets

Documents that contain personal, educational, or professional information about an individual, used for assessment or record-keeping purposes.

Analytical Abilities

Cognitive skills that enable a person to analyze, evaluate, and infer conclusions from various types of data.

General Knowledge

Broad, foundational knowledge covering various subjects or cultural topics without specialization.

Word Fluency

The ability to rapidly generate words that meet specified criteria, such as beginning with a certain letter or fitting into a category, which is often used to assess language and cognitive function.