Suppose the CPI Was 95 in 1955, and Suppose Currently

question 115

Multiple Choice

Suppose the CPI was 95 in 1955, and suppose currently the CPI is 475. According to the CPI, $100 today purchases the same amount of goods and services as

• A) $20.00 purchased in 1955.
• B) $33.33 purchased in 1955.
• C) $47.50 purchased in 1955.
• D) None of the above is correct.

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Definitions:

Subsidy

A financial aid or support extended by the government to an economic sector, business, or individual, often aimed at promoting economic and social policies.

Elasticity of Demand

An analysis of consumer demand's elasticity in relation to the pricing of a commodity.

Subsidy

Financial support extended by the government to an economic sector (or institution, business, or individual) with the aim of promoting economic and social policy.

Highly Elastic

Refers to a strong responsiveness of the quantity demanded or supplied of a good to a change in its price.