If the Price Index Is 90 in the First Year

question 140

Multiple Choice

If the price index is 90 in the first year, and 80 in the next year, what happened to prices?

• A) Prices increased by about 11%.
• B) Prices decreased by about 10%.
• C) Prices increased by about 10%.
• D) Prices decreased by about 11%.
• E) Prices did not change.

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Definitions:

1944 Dollars

The value of currency adjusted for inflation to reflect the purchasing power of the United States dollar in the year 1944.

Consumer Price Index (CPI)

A standard for measuring the weighted average expenditure on a compilation of consumer products and services such as transportation, healthcare, and food.

Base Period

A specific time interval used as a reference point for comparing economic or financial data over different periods for analysis or index calculation purposes.

Price of Gas

The cost per unit of gasoline, influenced by factors such as crude oil prices, taxes, demand, and supply conditions.