Author Question: A decrease in net taxes during a recession increases aggregate demand and helps the economy return ... (Read 65 times)

Charlie · **on:** Jun 30, 2018

A decrease in net taxes during a recession increases aggregate demand and helps the economy return to its potential output level.
a. True
b. False
Indicate whether the statement is true or false

Question 2

Which of the following is true about the consumer price index (CPI) and the GDP price index?
a. Both measures weigh prices by quantities consumed in some base year.
b. Both yield identical numbers for price level changes for any two years.
c. Both CPI and GDP price index underestimate changes in the price level in an economy.
d. The CPI measures changes in relative prices of goods, while the GDP price index measures changes in the absolute price level of a fixed basket of goods and services.
e. CPI includes products that are widely used, while GDP price index includes all goods and services.