If the Consumer Price Index Falls from 120 to 116

question 201

Multiple Choice

If the consumer price index falls from 120 to 116 in a particular year, the economy has experienced

• A)inflation of 4 percent.
• B)inflation of 3.33 percent.
• C)deflation of 3.33 percent.
• D)deflation of 4 percent.

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Definitions:

Land

A fixed asset category representing the ownership of a physical parcel of the earth's surface which is used in operations and has an indefinite useful life.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency of the company.

Inventory

The total value of a company's raw materials, work-in-progress, and finished goods that are considered assets on a balance sheet.

Account Receivable

Amounts owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.