The Price Index for 2007 Is 1

question 118

Multiple Choice

The price index for 2007 is 1.28. What does this mean?

• A) It means that the average price level has increased by 128 percent over 2006.
• B) It means that the average price level has increased by 1.28 percent over the base year.
• C) It means that the average price level of the base year was 128 percent less than that in 2007.
• D) It means that the average price level has increased by 28 percent over the base year.

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Definitions:

Inventory Considerations

Inventory considerations involve managing stock levels to align with business needs, avoiding both excess and shortages while optimizing costs.

Projected Unit Sales

The estimated quantity of products a company plans to sell in a future period, often used for planning and forecasting purposes.

Credit Sales

Sales in which the customer is allowed to purchase goods or services on the agreement they will pay at a later date.

Cash Receipts

Monies received by a business, recorded during the period they are received, including cash sales and collections from customers.