An Ideal Cost-Of-Living Index Measures

question 64

Multiple Choice

An ideal cost-of-living index measures:

• A) the relative cost of maintaining a particular utility level.
• B) the relative changes in consumer satisfaction that arise from price increases.
• C) the relative price of those goods that are considered to be necessities in consumption.
• D) none of the above

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Definitions:

Compensation of Employees

Refers to the total remuneration, in cash or in kind, payable by an employer to an employee in return for work done.

Total Income

Represents the aggregate revenue or earnings received by an individual, group, or entity from all sources before any deductions or taxes.

Human Capital

The skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country.

Physical Capital

The collection of tangible assets such as machinery, buildings, and equipment that are used in the production process.