If the CPI Is 120, This Means That

question 78

Multiple Choice

If the CPI is 120, this means that

• A) prices are 20 percent higher than in the reference base period.
• B) the inflation rate must be positive.
• C) prices are 0.12 times higher than in the reference base period.
• D) prices are 120 percent higher than in the reference base period.

---

Definitions:

Difference Threshold

The minimum difference in stimulation that a person can detect 50 percent of the time.

Relative Magnitude

The comparison of the size, extent, or importance of something in relation to another.

Difference Threshold

The least variation in stimulation that an individual is able to recognize 50% of the occasions, commonly termed as the just noticeable difference (JND).

Marginal Intensity

Marginal intensity refers to the change in the level of intensity or satisfaction gained from consuming an additional unit of a resource or performing an additional unit of activity.