Suppose That a Price Index in Latvia Was 120 in 2011

question 70

Multiple Choice

Suppose that a price index in Latvia was 120 in 2011 and 150 in 2012. The inflation rate between those two years was approximately

• A) 8 percent.
• B) 12.5 percent.
• C) 25 percent.
• D) 30 percent.

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Definitions:

Committed Fixed Costs

Long-term fixed costs that cannot be easily altered in the short term, such as leases, insurance, and salaries for permanent staff.

Planning Horizon

The period into the future for which a company or individual makes plans and decisions, considering both short-term and long-term objectives.

Cost Of Goods Sold

Costs that are directly tied to the generation of products a company markets, including both materials and labor.

Variable Cost

Charges that increase or decrease depending on the volume of production or sales, like raw materials and direct labor.