If the Average Price Level Rises from 120 in Year

question 15

Multiple Choice

If the average price level rises from 120 in year 1 to 130 in year 2, the inflation rate between years 1 and 2 will be:

• A) 7.69%.
• B) 8.33%.
• C) 9.23%.
• D) 10%.

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Definitions:

Total Utility

The total satisfaction or benefit a consumer receives from consuming a given total quantity of a good or service.

Satisfaction Levels

A measure of how goods or services meet or surpass customers' expectations.

Indifference Curve

A graph that shows a combination of two goods that give a consumer equal satisfaction and utility, representing their preferences.

Equal Satisfaction

A principle in consumer choice theory that suggests consumers allocate their resources to maximize satisfaction or utility.