Multiple Choice
Why do government leaders impose price controls such as price ceilings and price floors?
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5. Consumer and Producer Surplus; Price Ceilings and Floors
Price Ceilings, Price Floors, and Black Markets
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which one of the following is NOT a measure of the price level?
A
Producer Price Index (PPI)
B
Gross Domestic Product (GDP) Deflator
C
Unemployment Rate
D
Consumer Price Index (CPI)
Verified step by step guidance1
Understand that a measure of the price level is an index that tracks the average change over time in the prices paid by consumers or producers for a basket of goods and services.
Identify the Producer Price Index (PPI) as a measure that tracks the average change in selling prices received by domestic producers for their output, thus reflecting price level changes at the wholesale level.
Recognize the Gross Domestic Product (GDP) Deflator as a broad measure of the price level that reflects the prices of all goods and services included in GDP, capturing inflation across the entire economy.
Know that the Consumer Price Index (CPI) measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services, directly reflecting the cost of living.
Understand that the Unemployment Rate is not a measure of the price level; instead, it measures the percentage of the labor force that is unemployed and actively seeking work, which relates to labor market conditions rather than price changes.
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