The Practice of Increasing a Nominal Quantity Each Period by an Amount

question 54

Multiple Choice

The practice of increasing a nominal quantity each period by an amount equal to the percentage increase in a specified price index is called:

• A)a substitution bias.
• B)the Fisher effect.
• C)deflating.
• D)indexing.

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Definitions:

Trading Partners

Countries or entities that engage in the exchange of goods, services, or information.

Largest

Being the greatest in size, quantity, or degree compared to others in a set or group.

United States

A federal republic consisting of 50 states, a federal district, five major self-governing territories, and various possessions.

Comparative Advantage

The capacity of an entity, whether a single person, a corporation, or a nation, to create a product or offer a service more cost-effectively in terms of foregone opportunities than its competitors.