Author Question: If we compare the CPI to a perfect cost of living index, we find that they are A) different ... (Read 89 times)

jon_i · **on:** Jun 30, 2018

If we compare the CPI to a perfect cost of living index, we find that they are

A) different because the CPI does not measure prices.
B) the same thing.
C) not the same because the CPI has a fixed reference base period.
D) different because the CPI uses a fixed basket and has some measurement difficulties.
E) different because the cost of living has nothing to do with prices.

Question 2

An open market purchase by the Fed

A) increases the total amount of reserves in the banking system.
B) causes the reserve requirement to fall.
C) does not change the total amount of reserves in the banking system.
D) decreases the total amount of reserves in the banking system.