Consider a small economy in which consumers buy only two goods: apples and pears. In order to compute the consumer price index for this economy for two or more consecutive years, we assume that

Question

Answer

the percentage change in the price of apples is equal to the percentage change in the price of pears from year to year.

Answer

the number of apples bought by the typical consumer is equal to the number of pears bought by the typical consumer in each year.

Answer

neither the number of apples nor the number of pears bought by the typical consumer changes from year to year.

Answer

neither the price of apples nor the price of pears changes from year to year.

Crowdly

Consider a small economy in which consumers buy only two goods: apples and pears...

Want instant access to all verified answers on moodle4.city.ac.uk?