To Correct a Nominal Quantity for Changes in the Price

question 106

Multiple Choice

To correct a nominal quantity for changes in the price level, one should:

• A)add a price index to it.
• B)subtract a price index from it.
• C)divide it by a price index.
• D)multiply it by a price index.

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Definitions:

Common Stock

A type of securities representing ownership in a corporation, whereby holders have voting rights and may receive dividends.

Noncash Investing

Investment activities that do not involve the immediate inflow or outflow of cash, such as acquiring assets through the issuance of equity.

Capital Acquisitions Ratio

A financial metric that compares total acquisitions of property, plant, and equipment with cash flow from operating activities, indicating the extent to which operating cash flows are used to finance capital expenditures.

Operating Activities

The principal revenue-producing activities of an entity and other activities that are not investing or financing activities.