Suppose Over the Last Year That the Price of Iron

question 129

Multiple Choice

Suppose over the last year that the price of iron ore increased from $1,200 a ton to $1,275 a ton.Over the same time a measure of the overall price level increased from 150 to 156.The price of iron ore increased by

• A)less than inflation,so it became less scarce.
• B)less than inflation,so it became more scarce.
• C)more than inflation,so it became more scarce.
• D)more than inflation,so it became less scarce.

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Definitions:

Shareholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities.

Balance Sheet

A financial statement that shows a company’s assets, liabilities, and shareholders' equity at a specific point in time.

Continuity Assumption

A fundamental accounting principle assuming that a business will continue to operate indefinitely, maintaining its financial and operational policies without the intention or necessity of liquidation.

Foreseeable Future

A term used in planning and forecasting to describe the time period over which future events can be reliably predicted.