Suppose That in 2010,the Producer Price Index Increases by 1

question 137

Multiple Choice

Suppose that in 2010,the producer price index increases by 1.5 percent.As a result,economists most likely will predict that

• A)GDP will increase in 2011.
• B)the producer price index will increase by more than 1.5 percent in 2011.
• C)interest rates will decrease in the future.
• D)the consumer price index will increase in the future.

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Definitions:

Opportunity Cost

The potential benefit missed out on when choosing one alternative over another; essentially, it's the cost of foregoing the next best option.

Individual Choice

Decision-making by individuals based on their preferences, resources, and trade-offs they face.

Productive Capacity

The maximum output that an economy can produce without increasing inflation, driven by available resources and technology.

Specialization

The focus of a business, region, or individual on producing a limited range of goods or services to gain greater efficiency and productivity.