If the CPI in 2004 Is 200,and in 2005 the CPI

question 10

Multiple Choice

If the CPI in 2004 is 200,and in 2005 the CPI is 180,the rate of inflation from 2004 to 2005 is

• A)20%.
• B)10%.
• C)0%.
• D)-10%.

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Definitions:

Pareto Optimal

An allocation of resources from which it is impossible to reallocate without making at least one individual worse off.

Utility Function

A mathematical representation that captures the level of satisfaction or happiness that consumers derive from consuming goods and services.

Initial Endowment

The original distribution of resources, wealth, or abilities that individuals or groups possess in an economic model.

Pareto Optimal

A state of allocation of resources from which it is impossible to make any individual better off without making at least one individual worse off.