Suppose the Price Index Was 100 in 2014,109 in 2015,and

question 30

Multiple Choice

Suppose the price index was 100 in 2014,109 in 2015,and the inflation rate was lower between 2015 and 2016 than it was between 2014 and 2015.This means that

• A)the price index in 2016 was lower than 109.0.
• B)the price index in 2016 was lower than 118.9.
• C)the price index in 2016 was lower than 118.0.
• D)the inflation rate between 2015 and 2016 was lower than 1.09 percent.

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Definitions:

Open Market Operations

A monetary policy tool used by central banks to control the money supply by buying or selling government securities in the open market.

Reserve Requirement Ratio

The fraction of deposits which a bank is mandated to hold in reserve, either in its own vaults or with the central bank, rather than lending to consumers.

Checkable Deposits

Bank accounts that allow the account holder to write checks or use debit cards to make payments directly from the account.

New Reserves

Resources or assets that have been newly discovered or identified, often referring to natural resources like oil, gas, or minerals that can be economically extracted.