Which of the Following Changes in the Price Index Produces

question 330

Multiple Choice

Which of the following changes in the price index produces the greatest rate of inflation: 106 to 112,112 to 118,or 118 to 124?

• A) 106 to 112
• B) 112 to 118
• C) 118 to 124
• D) All of these changes produce the same rate of inflation.

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Definitions:

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced by an economy in a specific period accounting for changes in price level.

Trade Deficits

A situation where a country's imports of goods and services exceed its exports, resulting in a net outflow of domestic currency to foreign markets.

Real GDP

Gross Domestic Product adjusted for inflation, which reflects the value of all goods and services produced by an economy in a given year in base-year prices.

Price Level

The average price point of the entirety of goods and services in the economic scope.