A chain-weighted index
A) calculates changes in prices by using an average of base years from neighboring years to obtain a more accurate measure of real GDP growth.
B) is used to understate the rate of inflation.
C) is a useful tool for determining which fence to purchase.
D) uses neighboring years' data to calculate changes in nominal GDP.
Question 2
Recall the Application. As the world price of wool decreased, the quantity of wool supplied by individual ranchers would ________, and the quantity supplied in the whole market would ________.
A) decrease; increase B) increase; decrease C) increase; increase D) decrease; decrease
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