If the Price Index in 1922 Was 17 and a Unit

question 101

Multiple Choice

If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $0.32,and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $2.99,then the inflation-adjusted price of Oreos is:

• A) almost exactly the same (within 10%).
• B) much higher (twice or more) than today's actual price.
• C) much lower (half or less) than today's actual price.
• D) a bit higher than today's actual price (1-1.99 times as much).
• E) a bit lower than today's actual price (0.51-0.90 times as much).