What Is the Purpose of Measuring the Overall Level of Prices

question 151

Multiple Choice

What is the purpose of measuring the overall level of prices in the economy?

• A) to allow the measurement of GDP
• B) to allow consumers to know what kinds of prices to expect in the future
• C) to allow comparison between dollar figures from different points in time
• D) to allow government officials to determine whether the value of the dollar has increased or decreased

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Definitions:

Quantities Demanded

The total amount of a good or service that consumers are willing to buy at a given price over a specified period.

$5.00

A monetary value equivalent to five dollars.

Equilibrium Price

The price in the market where the amount of goods being offered matches the amount of goods people want to buy.

Increase

A situation where there is a rise in magnitude, quantity, or degree.