The Inflation Rate Measures

question 80

Multiple Choice

The inflation rate measures

• A)the annual change in the price level.
• B)the annual percentage change in the price level.
• C)the average price level.
• D)the annual percentage change in the wage rate.
• E)none of the above.

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Definitions:

Operating Cycle

The duration between a company's purchase of inventory and the receipt of cash from accounts receivable.

Accounts Receivable Period

The average number of days it takes for a business to receive payments owed by its customers for goods or services provided.

Inventory Period

The average time that inventory is held before it is sold or used in production.

Operating Cycle

Refers to the duration it takes for a company to buy goods or services, convert them into products, sell those products, and collect cash from the sales.