The Purpose of a Base Year When Constructing a Price

question 89

Multiple Choice

The purpose of a base year when constructing a price index is:

• A)Showing how the output values rise from year to year
• B)Encourage inflation
• C)Providing a means to compare the economy's output across different time periods
• D)To show why expenditures on government goods and services need to increase
• E)Indicate the progress in keeping prices low

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Definitions:

Warmth-Sensitive Receptors

Sensory receptors in the skin and other organs that detect changes in temperature, particularly increases in warmth.

Hypothalamus

A region of the brain that plays a crucial role in hormone production, regulating bodily functions such as temperature, hunger, and sleep cycles.

Peripheral Vasodilation

The widening of blood vessels away from the heart, typically in the limbs, reducing blood pressure and increasing blood flow.

Axilla

commonly known as the armpit, is the area on the human body under the joint where the arm connects to the shoulder.