Suppose That in 2016,all Prices in the Economy Double and That

question 175

Multiple Choice

Suppose that in 2016,all prices in the economy double and that all wages and salaries also double.In 2016 you

• A)are worse off than you were in 2015 as you can no longer afford to buy as many goods and services.
• B)are better off than you were in 2015 as your salary is higher than it was in 2015 and you can now buy more goods and services.
• C)are no better off or worse off than you were in 2015 as the purchasing power of your salary has remained the same.
• D)cannot determine whether you are better off or worse off than you were in 2015,because the purchasing power of your salary cannot be determined.

---

Definitions:

Cattle

Domesticated bovine animals that are raised for various purposes including meat (beef and veal), dairy products, leather, and as draught animals.

Opportunity Cost

Opportunity Cost is the value of the best alternative that is foregone when a particular decision is made.

Microchip

A small semiconductor device containing integrated circuits used in various electronic devices for processing, memory, or specific control functions.

Tire(s)

Rubber coverings placed on wheels of vehicles to provide traction and absorb shocks.