Of the Following Sequences of Price Levels, Which Correctly Represents

question 59

Multiple Choice

Of the following sequences of price levels, which correctly represents a 5 percent inflation rate?

• A)100, 100, 100, 100
• B)100, 105, 105, 105
• C)100, 105, 110, 115
• D)100, 105, 110.25, 115.76
• E)95, 100, 105, 110

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Definitions:

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total benefits that buyers and sellers receive from participating in the market.

Tax

A compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund various public expenditures.

Good

A tangible product or item that satisfies some human want or need.

Equilibrium Quantity

The quantity of goods or services supplied is exactly equal to the quantity demanded at the market price.