The Price Index Was 150 in the First Year,160 in the Second

question 28

Multiple Choice

The price index was 150 in the first year,160 in the second year,and 165 in the third year.Which of the following statements is correct?

• A)The price level was higher in the second year than in the first year,and it was higher in the third year than in the second year.
• B)The inflation rate was positive between the first and second years,and it was positive between the second and third years.
• C)The inflation rate was lower between the second and third years than it was between the first and second years.
• D)All of the above are correct.

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Definitions:

Economic Losses

Financial losses experienced by individuals, businesses, or economies as a result of factors such as poor investment decisions, natural disasters, or market downturns.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing to sell.

Exit

The process by which businesses cease operations and leave a market, often due to unprofitability or strategic realignment.

Economies of Scale

The cost advantages that enterprises obtain due to scale of operation, with cost per unit of output generally decreasing with increasing scale.