Author Question: Assume that you are currently making 15,000 a year as a sales clerk in a department store. At the ... (Read 115 times)

cherise1989 · **on:** Jun 29, 2018

Assume that you are currently making 15,000 a year as a sales clerk in a department store.

At the end of your senior year in college in May you get a job offer from a large accounting firm that won't start until late August of that same year but which pays 45,000 per year. What would you expect might happen to your demand for an automobile and new clothes immediately and why?

Question 2

The Fed uses a core price index, one that excludes food and energy prices to measure inflation. It does so because

A) food and energy prices have wide swings that are not related to the causes of general inflation.
B) food and energy have inelastic demand curves and consumers will buy them regardless of their price.
C) food and energy prices do not change all that much during the short run, so are irrelevant to the calculation of inflation.
D) it wants to avoid the blame for high gasoline prices causing inflation.

mohan · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

Because of the expectation of higher income in the future you will probably purchase a car and some new clothes to get ready for the new job.

Answer to Question 2

A