Which of the Following Indicators Provides the Clearest Indication That

question 88

Multiple Choice

Which of the following indicators provides the clearest indication that an economy is experiencing deflation?

• A) A decrease in the unemployment rate
• B) A decrease in GDP
• C) An increase in the PPI
• D) A decrease in the CPI

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Definitions:

Selling Price

The price at which a product or service is offered to the consumer.

Contribution Margin

The contribution margin is the sales revenue minus the variable costs. It shows how much revenue contributes to covering the fixed costs and generating profit.

Fixed Corporate Costs

Expenses that do not vary with production levels, including salaries of executives, rent, and insurance.

Fixed Costs

Expenses that do not change with the level of output or sales over a specific period, such as rent, salaries, or insurance.