Between 2014 and 2015, the CPI of a Small Nation

question 231

Multiple Choice

Between 2014 and 2015, the CPI of a small nation rose from 182 to 185.If household incomes rose by 3% during that period of time, which of the following is true?

• A)The purchasing power of household income rose between 2014 and 2015.
• B)The purchasing power of household income fell between 2014 and 2015.
• C)The purchasing power of household income remained constant between 2014 and 2015.
• D)The CPI cannot be used to determine how the purchasing power of household income changes over time.

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Definitions:

Calendar-Year

A one-year period that begins on January 1 and ends on December 31, used for financial and taxation purposes.

Revenue

The total income generated by the sale of goods or services related to the company's primary operations.

Unearned Fees

Income received for services that have not yet been performed, similar to unearned revenue but specifically related to service fees.

Fees Earned

Revenue recognized from providing services, as opposed to selling goods.