1.The limitation of CPI includes,

a.comparison of shopping

b.ignoring real vs. nominal conversation

c.irrational choice in decision making

d.underestimating goods substitution

e.ignore non-market output

2. The principle of increasing cost is defined as

a.increasing opportunity cost

b.rise in resource input prices

c.increase in quantity demanded

d.increase in price

3.If the market for a good is initially in equilibrium and there is a rightward shift in the supply curve, then

a.the equilibrium price and quantity will fall

b.the supply curve will shift to the left

c.there will be a rightward movement along the supply curve

d.the demand curve will shift back as consumers react to the higher equilibrium price

e,there will be a rightward movement along the demand curve

4. The largest component of GDP expenditure approach is

a.government purchases

b.net exports

c. a virtual tie between consumption spending and government purchases

d. consumption spending

5. The CPI is most accurate at tracking

a. the cost of living

b. the effects of changes in consumer buying habits on prices

c. the effects of changes in consumer product quality on prices

d.the cost of a fixed basket of goods