Suppose the Price Index Was 105 in 2007, 115

question 294

Multiple Choice

Suppose the price index was 105 in 2007, 115.5 in 2008, and the inflation rate was lower between 2008 and 2009 than it was between 2007 and 2008. This means that

• A)the price index in 2009 was lower than 115.5.
• B)the price index in 2009 was lower than 126.
• C)the price index in 2009 was lower than 127.05.
• D)the inflation rate between 2008 and 2009 was lower than 1.1 percent.

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Definitions:

Financial Statements

Formal records that outline the financial activities and conditions of a business, entity, or individual, including the balance sheet, income statement, and cash flow statement.

Retained Earnings

Funds that are not distributed as dividends but are reserved by the company to reinvest in its business, pay off debt, or save for future use.

Deficit

The amount by which expenses exceed income or liabilities exceed assets.