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:

Uninsurable Risks

refers to risks that insurance companies are unwilling to cover due to their unpredictable or potentially catastrophic nature.

Entrepreneur

A person who organizes, operates, and assumes the risk for a business venture, often introducing new products, services, or business processes.

Short-Term Loans

Financial borrowing intended to be repaid within a short period, usually less than a year.