The Table Below Shows Vietnam's Price Index Between 2004 and 2007

question 40

Multiple Choice

The table below shows Vietnam's price index between 2004 and 2007. $$\begin{array} { | c | c | } \hline \text { Year } & \text { Price Index } \\\hline 2004 & 115.15 \\\hline 2005 & 124.65 \\\hline 2006 & 134 \\\hline 2007 & 145.12 \\\hline\end{array}$$
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From the data,we can conclude that

• A) the inflation rate 2005 and 2006 was 7.5 percent.
• B) food and energy prices in Vietnam were increasing between 2004 and 2007.
• C) commodity substitution bias occurred over the four years.
• D) deflation occurred between 2005 and 2006 as price increased more slowly than in 2004.

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Definitions:

Foreign Demand

The desire and willingness of buyers in other countries to purchase goods and services from a particular nation.

Quota

A government-imposed trade restriction that limits the number or monetary value of goods that can be imported or exported during a specified period.

Motorcycle Imports

Refers to the bringing in of motorcycles from foreign countries into a domestic market usually subject to tariffs, quotas, and regulations.

Quantity Imported

This refers to the total amount of goods brought into a country from abroad for commercial purposes.