Which One of the Following Is True

question 59

Multiple Choice

Which one of the following is true?

• A) Inflation increases the real value of money.
• B) In the base year, the value of a price index is 100.
• C) The consumer price index measures changes in the average income of consumers.
• D) The market basket defined for the consumer price index contains more items than does the market basket defined for the GDP deflator.

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Definitions:

Society

A structured community of people bound together by similar traditions, institutions, or nationality.

Logrolling

The trading of votes by legislators to secure favorable outcomes on decisions concerning the provision of public goods and quasi-public goods.

Diminish

To decrease or make smaller in size, importance, or intensity.

Excludability

The characteristic displayed by those goods and services for which sellers are able to prevent nonbuyers from obtaining benefits.