Which of the Following Statements Is True

question 68

Multiple Choice

Which of the following statements is true?

• A) The CPI can be accurately computed using two different baskets of goods across two different periods.
• B) The implicit price deflator is computed using a fixed basket of certain consumer goods.
• C) The CPI and the implicit price deflator can be used to calculate inflation.
• D) The CPI is computed using the value of nominal GDP.

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Definitions:

Profit and Loss Basis

Profit and Loss Basis is a method of accounting that records revenues and expenses as they are earned or incurred, used to determine a company's financial performance over a period.

Liquidation Expenses

Costs associated with converting assets into cash or paying off debt during the winding up of a business.

Book Value

The net value of a company's assets minus its liabilities, often used to assess if a stock is under or overvalued.

Final Settlement

The conclusive resolution of a financial contract's obligation, often through payment or the transfer of assets.