Which of the Following Statements Is Correct

question 83

Multiple Choice

Which of the following statements is correct?

• A)In order to calculate the inflation rate for the year 2011,we need to know the values of the consumer price index for the years 2009,2010,and 2011.
• B)Changes in the consumer price index are often thought to be useful in predicting changes in the producer price index.
• C)Despite its name,the "consumer price index" really measures the overall cost of the goods and services bought by consumers,business firms,and units of government.
• D)If the prices of all goods and services changed proportionately over time,then the consumer price index would reflect no substitution bias.

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Definitions:

Common Shares

Equity securities that represent ownership in a company, giving holders voting rights and a share in the company's profits via dividends.

Conversion Value

The value of a convertible security if it is converted into a different asset, usually common stock, at its current price.

Convertible Bonds

Convertible bonds are fixed-income debt securities that the holder can convert into a specified number of common stock or equity shares of the issuing company.

Stock Price

The current market value of a publicly traded company's shares, reflecting investor perceptions of its future financial prospects.