If a Price Index Increased from 400 to 440 Over

question 28

Multiple Choice

If a price index increased from 400 to 440 over the course of a year, then the inflation rate is:

• A) 4%.
• B) 9%.
• C) 10%.
• D) 40%.

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Definitions:

Break-Even Point

The financial point where total costs and total revenues are exactly equal, meaning there is no profit or loss.

Short Run

In economics, a timeframe during which the production process has limitations due to fixed resources, leading to constraints on firm adjustments and outputs.

Long Run

The long run is a period in economics during which all factors of production and outputs are variable and can be adjusted, contrary to the fixed factors present in the short run.

Marginal Cost Curve

A visual display illustrating the variation in the expense of manufacturing an extra item of a product as the quantity produced alters.