Author Question: The CPI overestimates inflation because a. it often ignores the invention of new goods. b. it ... (Read 22 times)

HCHenry · **on:** Jun 30, 2018

The CPI overestimates inflation because

a. it often ignores the invention of new goods.
b. it always includes discount stores.
c. it allows substitution from more expensive goods to cheaper goods.
d. all of the above.

Question 2

In the classical model, a tax on capital will

a. increase the demand for labor, the real wage, and output.
b. increase the supply of labor, reduce real wages, and increase output.
c. decrease the demand for labor, the real wage, and output.
d. have no effect on the labor market.
e. increase both labor demand and supply, which will increase output.