The Price Index for 2007 Is 1

question 118

Multiple Choice

The price index for 2007 is 1.28. What does this mean?

• A) It means that the average price level has increased by 128 percent over 2006.
• B) It means that the average price level has increased by 1.28 percent over the base year.
• C) It means that the average price level of the base year was 128 percent less than that in 2007.
• D) It means that the average price level has increased by 28 percent over the base year.

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Definitions:

Financial Statements

Official records that detail the financial activities and condition of a business or individual, including the balance sheet, income statement, and cash flow statement.

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An equation or graph that shows the maximum output a firm can produce with a given set of inputs, under the current technology.