If the Price Index in the First Year Was 80

question 45

Multiple Choice

If the price index in the first year was 80, in the second year was 100, and in the third year was 90, what did the economy experience?

• A) 20 percent inflation between the first and second years and 10 percent inflation between the second and third years
• B) 20 percent inflation between the first and second years and 10 percent deflation between the second and third years
• C) 25 percent inflation between the first and second years and 10 percent inflation between the second and third years
• D) 25 percent inflation between the first and second years and 10 percent deflation between the second and third years

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Definitions:

Clean-Up Requirements

Environmental or legal directives that mandate the remediation of pollution or contaminants from a site.

Compensating Balance

A minimum account balance that a borrower is required to maintain with a lender, which can reduce the effective amount of loan available to the borrower.

Cash Balances

The total amount of cash in a company's account at any given time, which can be used for transactions or as a reserve.

Receivables Financing

A form of financing where a company uses its outstanding invoices or receivables as collateral to secure a loan or advance.