The Price Index _____

question 123

Multiple Choice

The price index _____

• A) represents the relationship between the economy's price level and aggregate output demanded.
• B) shows how the economy's output changes over time.
• C) is used to figure out real GDP each year.
• D) aggregates output measured in dollars of constant purchasing power.
• E) represents the relationship between the economy's price level and real GDP.

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Definitions:

LIFO

Last In, First Out, an inventory valuation method where the last items placed in inventory are the first ones sold.

Link-Chain Method

A statistical method used for adjusting economic or financial time series data for the effects of inflation or other external factors to show real changes over time.

Dollar-Value LIFO

Dollar-value LIFO (Last In, First Out) is an accounting method used for inventory that measures the cost of inventory in dollar terms, adjusting for inflation.