If 2015 Is the Base Year and the Inflation Rate

question 138

Multiple Choice

If 2015 is the base year and the inflation rate between 2015 and 2016 is 6.4%, the price index in 2016 is

• A) 106.4.
• B) 64.0.
• C) 16.4.
• D) cannot be determined from this information because the index in the base year is not given

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Definitions:

Average Fixed Costs

Costs in production that are stable and do not vary with the amount of output, divided by the quantity of goods produced.

Output

The total amount of goods or services produced by a person, machine, factory, country, etc., within a certain period.

Total Cost Schedule

A detailed list that shows the total cost incurred at various levels of output or production.

Total Variable Cost

The sum of all costs that vary with the output level in the production of goods or services.