Which of the Following Functions Are Performed by Changes in Relative

question 21

Multiple Choice

Which of the following functions are performed by changes in relative prices but not by changes in average prices?

• A)Computing real income from nominal income.
• B)Indicating an overheating economy.
• C)Signaling changes in the desired mix of output.
• D)Measuring the rates of inflation.

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Definitions:

Equity Method

An accounting method used to record investments in which the investor has significant influence but not full control.

Total Dividends

The total sum of money paid to shareholders out of a company's earnings.

Equity Method

An accounting technique used to record an investment in another company, where the investment is initially recorded at cost and subsequently adjusted to reflect the investor's share of the investee's profit or loss.

Common Shares

Equity securities that represent ownership in a corporation, providing rights to dividends and the ability to vote at shareholder meetings.