If the Price of Housing (Which Accounts for 40 Percent

question 54

Multiple Choice

If the price of housing (which accounts for 40 percent of total expenditures in the CPI basket) , rises by 5 percent in one year while the prices of all other goods remain constant, by how much will the CPI rise?

• A)2 percent
• B)5 percent
• C)10 percent
• D)40 percent

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Definitions:

Purchase Discounts

Reductions in the purchase price of goods, often granted by suppliers for early payment.

Profit Margin

The percentage difference between a product's selling price and the cost to produce it, indicating the financial health and profitability of a business.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues, indicating financial performance over a period.

Operating Income

The profit realized from a business's normal operational activities, calculated before tax by subtracting operating expenses from gross profit.