The Reference Base Period Is 2002

question 55

Multiple Choice

The reference base period is 2002. A consumer price index of 122 in 2014 means that

• A)prices of consumer goods have gone up by a factor of 12.2.
• B)if the price of a good was $100 in 2002, its price in 2014 is $122.
• C)prices of consumer goods have more than doubled.
• D)the market basket of consumer goods that cost $122 in 2002 can be purchased for $100 in 2014.
• E)the average of the prices paid by urban consumers for a fixed market basket of consumer goods and services was 22 percent higher in 2014 than it was on average during 2002.

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Definitions:

Financing Cash Flows

Cash flows associated with the raising of capital and repayment of borrowings, including issuing and repurchasing shares, and payment of dividends.

Subsidiaries Acquired

Refers to companies that have been bought and are now controlled by a parent company, becoming part of a larger corporate family.

Reconstruction Of Ledger

The process of reorganizing a company's ledger to correct errors or after a significant transaction.