Assume That Consumers Consider Rice and Potatoes to Be Substitutes,so

question 62

Multiple Choice

Assume that consumers consider rice and potatoes to be substitutes,so that when the price of rice rises,consumers purchase less rice and more potatoes.When the CPI is computed following the increase in the price of rice,it takes into account

• A)the increase in the price of rice.
• B)the decrease in the quantity of rice purchased and the increase in the quantity of potatoes purchased.
• C)Both (a)and (b)are correct.
• D)None of the above is correct.

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Definitions:

Mutual Funds

Investment programs funded by shareholders that trade in diversified holdings and are professionally managed.

Borrowed Funds

Money that has been obtained through loans or credit, typically subject to repayment with interest.

Budget Deficit

A financial situation where a government's expenditures exceed its revenues, leading to a net amount of money that needs to be borrowed.

Loanable Funds

A term used in economics to describe the market where borrowers find funds from savers, impacting interest rates.