In the Basket of Goods That Is Used to Compute

question 167

Multiple Choice

In the basket of goods that is used to compute the consumer price index,which of the following categories of consumer spending is the largest?

• A)education & communication
• B)recreation
• C)medical care
• D)All of the above categories are about equal in magnitude.

---

Definitions:

Discount Rate

The interest rate used to discount future cash flows to their present value, reflecting the time value of money and risk.

Initial Investment

The initial outlay of money required to start a project, purchase an asset, or invest in a business venture.

Useful Life

The estimated period over which an asset is expected to be usable for the purpose it was acquired.

Salvage Value

The anticipated remaining value of an asset at the conclusion of its operational life.