If the Price Index Rises from 100 to 130, Then

question 7

Multiple Choice

If the price index rises from 100 to 130, then the purchasing power of the dollar will fall by about

• A) 15 percent.
• B) 19 percent.
• C) 23 percent.
• D) 30 percent.

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Definitions:

Time Constraint

A limitation or restriction on the period within which something can be achieved.

Microeconomics

The branch of economics that focuses on the actions of individuals and industries, like the dynamics between buyers and sellers, borrowers and lenders.

Free Time

Periods when an individual is not engaged in work and can choose leisure or other personal activities.

Laspeyres Price Index

A measure of price inflation or deflation for a specified set of goods and services, using the quantities of the base year as weights.