If the Consumer Price Index Is 135 at the End

question 55

Multiple Choice

If the consumer price index is 135 at the end of 2011 and,at the end of 2012,it is 142,then during 2012 the economy experienced

• A) deflation.
• B) inflation.
• C) hyperinflation.
• D) indexing.
• E) deflating.

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Definitions:

Absorption Costing

This accounting system ensures the inclusion of all manufacturing-related expenses, such as direct materials, direct labor, and both variable and fixed overheads, into the cost of producing a product.

Variable Costing

An accounting technique that incorporates just the variable costs of production (such as direct materials, direct labor, and variable manufacturing overhead) into the costs of products.

Fixed Overhead

Regular, static expenses that do not change with the level of production or sales, including rent, salaries, and insurance.

Net Income

The profit of a company after all expenses and taxes have been deducted from revenue.