Which of the Following Is the Correct Interpretation of a Paasche

question 7

Multiple Choice

Which of the following is the correct interpretation of a Paasche price index of 75, where the base year is 2009 and the current year is 2011?

• A)According to the Paasche price index, prices have decreased by 75% from 2009 to 2011.
• B)According to the Paasche price index, prices have decreased by 25% from 2011 to 2009.
• C)According to the Paasche price index, prices have decreased by 25% from 2009 to 2011.
• D)None of these choices are correct.

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Definitions:

Federal Revenues

Income received by the federal government from taxes, fees, and other sources.

Annually Balanced Budget

A fiscal strategy or policy where government revenues are planned to match expenditures within a single year, aiming to prevent budget deficits.

Tax Revenues

Tax revenues refer to the income that is collected by the government from individuals and businesses, primarily through taxes such as income tax, sales tax, and property tax.

Government Spending

Government spending encompasses all the expenditures of government agencies and departments, including investments, consumption, and transfers, aimed at achieving economic and social objectives.