The Price Index in the First Year Is 120, in the Second

question 157

Multiple Choice

The price index in the first year is 120, in the second year is 150, and in the third year is 180. What is the inflation rate between the first and second year and between the second and third year?

• A) 20 percent between the first and second year, 33 percent between the second and third year
• B) 25 percent between the first and second year, 20 percent between the second and third year
• C) 25 percent between the first and second year, 50 percent between the second and third year
• D) 30 percent between the first and second year, 30 percent between the second and third year

---

Definitions:

Production Techniques

Methods and processes used in the transformation of inputs into outputs or goods and services by a firm.

Widgets

A generic term often used to describe an unspecified or hypothetical manufactured product.

Labor

The use of mental and physical capabilities in the creation of products and services.

Efficient

Describes a system or process that achieves maximum productivity with minimum wasted effort or expense.