For an Imaginary Economy,the Value of the Consumer Price Index

question 16

Multiple Choice

For an imaginary economy,the value of the consumer price index was 140 in 2013,and the inflation rate was 5.0 percent between 2013 and 2014.The consumer price index in 2014 was

• A)145.0.
• B)147.0.
• C)135.0.
• D)133.3.

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Definitions:

Normal Good

An item whose demand grows when the income of consumers goes up, and diminishes when their income goes down.

Used Cars

Pre-owned vehicles that have had one or more retail owners, sold through various outlets including dealerships and private sales.

Input Production

The process of using resources (inputs) to create goods or services.

Substitutes Consumption

Refers to the consumption of goods that can replace each other in use, affecting the demand for these goods.