Last Year a Pair of Jeans Had a Price of $20

question 283

Multiple Choice

Last year a pair of jeans had a price of $20 and this year the price is $25. Which of the following expresses this price change accurately?

• A) If this year is the base year, the index number for last year would be 120.
• B) If last year is the base year, the index number for this year would be 120.
• C) If this year is the base year, the index number for last year would be 80.
• D) If last year is the base year, the index number for this year would be 80.

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Definitions:

Federal Advisory Council

A group of individuals who provide advice and support to a central governing body, such as the Federal Reserve in the United States, on matters of economic policy.

Expansionary Monetary Policy

Monetary policy measures, such as lowering interest rates and increasing money supply, used by central banks to stimulate economic growth.

U.S. Dollar

The official currency of the United States, widely used as a standard of value and medium of exchange globally.

Balance Of Trade

The difference in value between a country's imports and exports over a given period.