Over the Period of 1926 to 2011,the Average Rate of Inflation

question 71

Multiple Choice

Over the period of 1926 to 2011,the average rate of inflation was _____%.

• A) 2.0
• B) 2.7
• C) 3.1
• D) 3.8
• E) 4.3

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Definitions:

Laspeyres Price Index

A measure of price inflation or deflation for a specified set of goods and services, using the quantities of the base year as weights.

Ideal Cost-Of-Living Index

Cost of attaining a given level of utility at current prices relative to the cost of attaining the same utility at base-year prices.

Paasche Index

An economic measure that calculates the change in the cost of purchasing a specified basket of goods and services in a given year compared to a base year, using current-period weighting.

Nominal Income

The amount of money earned in current dollars, not adjusted for inflation.