An Inflation Rate of 5% Between 2017 and 2018 Would

question 245

Multiple Choice

An inflation rate of 5% between 2017 and 2018 would be implied by a change in the GDP deflator from ________ in 2017 to ________ in 2018.

• A)105; 115
• B)200; 205
• C)400; 420
• D)375; 390

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Definitions:

Fair Market Price

The price that a willing buyer and a willing seller agree upon, assuming both parties have reasonable knowledge of the item's relevance and are under no pressure to buy or sell.

Loss On Redemption

The loss incurred when a debt obligation or security is redeemed before its maturity date at a value less than the original purchase price or par value.

Carrying Amount

The balance of the bonds payable account (face amount of the bonds) less any unamortized discount or plus any unamortized premium.

Unamortized Discount

The portion of a bond's face value that has not yet been expensed as interest over time to reflect the bond being issued below its par value.