Which of the Following Is NOT True of Price Indexes

question 76

Multiple Choice

Which of the following is NOT true of price indexes?

• A) They show changes in the general level of prices.
• B) They are used to estimate the rate of inflation or deflation.
• C) They are used to convert nominal values to real values, so comparisons can be made across time.
• D) They are used to compute the growth rate of real output in the economy.

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Definitions:

Farmer

An individual engaged in the practice of agriculture, raising living organisms for food or raw materials.

Percentage-Of-Completion Method

An accounting technique used in long-term contracts, recognizing revenue and expenses based on the project's estimated completion level.

Revenue

The total income generated from normal business operations and before any costs or expenses are deducted.

Progress Payments

Payments made on a contract in advance of the final delivery, typically based on the completion of certain stages or milestones within the project.