The Consumer Price Index (CPI) Is a Measure of Inflation

question 114

Multiple Choice

The consumer price index (CPI) is a measure of inflation for

• A) farmers.
• B) an elderly couple recently retired to Yuma, Arizona.
• C) Apple Computer.
• D) a typical consumer of the market basket used to calculate the index.

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Definitions:

Accounts Receivable

Money owed to a company by its customers for products or services that have been delivered but not yet paid for.

Inventory

The total amount of goods and materials held by a company for the purpose of resale or production.

Current Ratio

A financial ratio that gauges a firm's capacity to meet its short-term debts or obligations due within the next year.

Acid-Test Ratio

A financial metric that measures a company's ability to pay off its current liabilities with its quick assets (cash, marketable securities, and receivables).