If the Price Index in 1922 Was 17 and a Unit

question 26

Multiple Choice

If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $0.32,and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $2.99,then the inflation-adjusted price of Oreos today is

• A) almost exactly the same (within 10 percent)as in 1922.
• B) much higher (twice or more)than in 1922.
• C) much lower (half or less)than in 1922.
• D) a bit higher than in 1922.
• E) a bit lower than in 1922.

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Definitions:

Finished Goods Inventory

Products that have been manufactured and are ready for sale, but have not yet been sold to customers.

Goods In Process Inventory

The value of materials, labor, and overhead costs for products that are partially completed in the manufacturing process.