To Ensure That a Nominal Payment Represents a Constant Level

question 81

Multiple Choice

To ensure that a nominal payment represents a constant level of purchasing power over time, one should:

• A) add a price index to it.
• B) subtract a price index from it.
• C) divide it by a price index.
• D) increase it by a percentage equal to the rate of inflation for that year.

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Definitions:

Stipulative Definition

A definition that introduces a new concept (or a new meaning for an existing concept) by specifying the criteria for inclusion in the concept.

Too Broad

A term used to describe a statement, topic, or question that is not sufficiently narrowed down, making it difficult to address or answer effectively.

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