If There Is a 5 Percent Increase in the CPI

question 85

Multiple Choice

If there is a 5 percent increase in the CPI, then there will most likely be

• A)a 5 percent rise in the cost of living.
• B)a less than 5 percent rise in the cost of living because of consumers substituting away from goods whose relative prices rise towards other goods.
• C)a more than 5 percent rise in the cost of living because of consumers substituting away from goods whose relative prices rise towards other goods.
• D)a less than 5 percent rise in the cost of living because of falling quality of goods over time.
• E)a more than 5 percent rise in the cost of living because of the introduction of new goods.

---

Definitions:

Noncontrolling Interest

The portion of equity (ownership) interest in a subsidiary not attributable to the parent company.

Intra-Entity Asset Transfers

Transactions involving the transfer of assets between divisions or units within the same company.

Net Income

Company's earnings following the deduction of all expenses and taxes from its revenue.