A Price Index Can Rise from One Year to the Next

question 74

Multiple Choice

A price index can rise from one year to the next even though:

• A)some individual prices in the economy fall.
• B)nominal GDP falls.
• C)real GDP falls.
• D)all of the above occur.

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Definitions:

Stamp Act

A British law passed in 1765 imposing a tax on all paper documents in the American colonies, which sparked widespread protests and was a major grievance leading up to the American Revolution.

Virginia Assembly

The legislative body of the Colony of Virginia, established in the 17th century, and a precedent for democratic governance in the English colonies.

British Army

The principal land warfare force of the United Kingdom, responsible for protecting the country and supporting international peacekeeping efforts.

Stamp Act Congress

was a meeting held in 1765 in New York City, consisting of representatives from several of the British colonies in North America; it was the first gathering of elected representatives to devise a unified protest against new British taxation.