Unit-Of-Account Costs Refer to The

question 31

Multiple Choice

Unit-of-account costs refer to the:

• A) increase in prices during inflation.
• B) decrease in the value of money during inflation.
• C) loss of the reliability of money as a relative unit of measurement.
• D) increased costs of servicing bank accounts during inflation.

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Definitions:

Absolute Purchasing Power Parity

A theory stating that identical goods and services in different countries should cost the same when priced in a common currency.

Standardized Good

a product that is produced to a set standard, making it interchangeable with similar products.

Economic Values

The worth of goods or services determined by the market, where price represents the quantity of resources people are willing to exchange for it.

Absolute Purchasing Power Parity

The economic theory that the price of a good should be the same in different countries when expressed in a common currency, accounting for exchange rates.