Suppose That the Inflation Rate Was 4 Percent in 2002

question 132

Multiple Choice

Suppose that the inflation rate was 4 percent in 2002 and 3 percent in 2003.This would mean that

• A) the price level fell from 2002 to 2003
• B) the price level fell at a faster rate in 2003 than in 2002
• C) the price level rose at a faster rate in 2003 than in 2002
• D) the price level rose at a slower rate in 2003 than in 2002
• E) all prices in the economy rose at a rate of 3 percent in 2003

---

Definitions:

Inventory Turnover

A measure of how frequently a company sells and replaces its stock of goods within a given period, indicating efficiency in inventory management.

Average Inventory

The mean amount of stock held by a company over a certain period, used to manage inventory levels efficiently.

Sales

The activities involved in selling goods or services to customers.

Debt Ratio

A financial ratio that measures the extent of a company's leverage, calculated by dividing its total liabilities by its total assets.