Author Question: The fact that the CPI is a biased measure of the inflation rate means government outlays will A) ... (Read 59 times)

futuristic · **on:** Jun 29, 2018

The fact that the CPI is a biased measure of the inflation rate means government outlays will

A) increase at a slower rate than the actual inflation rate.
B) increase at the same rate as the actual inflation rate.
C) increase at a faster rate than the actual inflation rate.
D) sometimes increase faster and sometimes increase slower than the actual inflation rate depending on whether the actual inflation rate exceeds 1.1 percent per year or is less than 1.1 percent per year.
E) None of the above because the bias in inflation measured using the CPI has nothing to do with government outlays.

Question 2

If we compare the Canadian natural unemployment rate to the U.S. natural unemployment rate, we find that for most years since 1980

A) the Canadian rate is higher, possibly the result of higher unemployment benefits in the United States for most of those years.
B) the U.S. rate is higher, possibly the result of greater job search within a larger country.
C) they are essentially the same because we have a lot in common.
D) the Canadian rate is higher, possibly the result of higher unemployment benefits in Canada for most of those years.
E) The U.S. rate is higher, possibly the result of more structural change occurring in the United States.