If the CPI Was 121

question 188

Multiple Choice

If the CPI was 121.5 at the end of last year and 138.3 at the end of this year, the inflation rate over these two years was

• A) 10.2 percent.
• B) 13.8 percent.
• C) 12.2 percent.
• D) 16.8 percent.

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Definitions:

Efficiency Losses

Reductions in economic well-being, reflected by the inability of a market to allocate resources optimally.

Standard Costs

The predetermined expenses for the production of a product or operation of a service, used as a baseline to measure performance.

Direct Labor Wage Variance

The difference between the expected cost of direct labor for production and the actual cost incurred.

Direct Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected, multiplied by the standard labor rate.