Suppose an Index of Average Prices of Imported Goods in Canada

question 32

Multiple Choice

Suppose an index of average prices of imported goods in Canada indicates an increase in price of 2.3% over a 12-month period.Over the same period the Consumer Price Index indicates an increase in the general price level of 2.3%.What is the change in the price of imports relative to the change in the overall price level?

• A)an increase of 2.3%
• B)an increase of 4.6%
• C)a decrease of 2.3%
• D)a decrease of 4.6%
• E)no change

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Definitions:

Coefficient

A numerical or constant quantity placed before and multiplying the variable in an algebraic expression, often representing a measure of some property.

Midpoint Formula

A method used in geometry and economics to find the midpoint or the average of two points on a line segment.

Consumer Expenditure

The total amount spent by consumers on goods and services in a given period.