A Measure of the Average Price of a Given Class

question 85

Multiple Choice

A measure of the average price of a given class of goods or services relative to the price of the same goods and services in a base year is called a:

• A)real price.
• B)real quantity.
• C)rate of inflation.
• D)price index.

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Definitions:

Tax Depreciation

The method by which a business writes off the cost of a tangible asset over its useful life for tax purposes.

Book Depreciation

The allocation of the cost of a tangible asset over its useful life for accounting and tax purposes.

Tax Rate

The percentage at which an individual or corporation is taxed, or the government's claim on earnings.

Income Tax Expense

The amount of income taxes a company expects to pay for the current tax year, accounting for deferred taxes.