-Based on the Above Table, If the Current Price Level

question 195

Multiple Choice

$$\begin{array} { c c } \begin{array} { c } \text { Price level } \\( 2005 = 100 ) \end{array} & \begin{array} { c } \text { Unemployment rate } \\\text { (percentage) }\end{array} \\\hline 102 & 7 \\103 & 6 \\105 & 5 \\108 & 4 \\112 & 3 \\\hline\end{array}$$
-Based on the above table, if the current price level is 100 and the natural unemployment rate is 5 percent, what is the expected inflation rate?

• A) 2 percent
• B) 3 percent
• C) 5 percent
• D) 8 percent
• E) 12 percent

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Definitions:

Net Sales

Net sales is the total revenue from goods and services sold by a business, minus returns, allowances, and discounts, indicating the actual sales revenue.

Cost Of Goods Sold

The direct costs attributable to the production of goods sold by a company, including material, labor, and overhead costs.

Gross Profit Rate

A financial metric that measures a company's gross profit as a percentage of its net sales, indicating the efficiency of production and pricing.

Cost Of Goods Sold

The costs directly related to the creation of products sold by a company, including expenses for raw materials and wages.