A 10% Inflation Rate Means That

question 79

Multiple Choice

A 10% inflation rate means that

• A)prices of some important goods and services have increased by 10%.
• B)every price in the economy has increased by 10%.
• C)the money supply has increased by 10%.
• D)the price level has increased by 10%.

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Definitions:

Average Variable Cost

The total variable costs divided by the quantity of output, indicating the variable cost per unit of output.

Marginal Cost

The hike in production costs when an additional unit of a good or service is manufactured.

Market Price

The existing selling or buying price for a service or asset in a particular trading environment.

Economic Profit

The total revenue of a business minus its total costs, including both explicit and implicit costs.