If the Total Expenditures of a Typical Family Equaled $35,000

question 123

Multiple Choice

If the total expenditures of a typical family equaled $35,000 per year in 2010 and the exact same basket of goods and services cost $40,000 in the year 2015, the family's cost of living:

• A)increased by 14 percent.
• B)decreased by 12.5 percent.
• C)decreased by 14 percent.
• D)increased by 12.5 percent.

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Definitions:

Inventory Investment

The capital tied up in goods and materials kept in stock, which represents a cost and risk to the business.

Demand for Inventoried Items

The need or desire for products or goods that are kept in stock for sale or distribution.

Reductions

Refers to decreases or cuts in quantities, capacities, workforce, costs, or other financial or operational metrics as a strategic or cost-saving measure.

Total Purchases

The aggregate amount of goods and services bought over a certain period of time.