When the Consumer Price Index Falls from 110 to 100

question 154

Multiple Choice

When the Consumer Price Index falls from 110 to 100

• A)there is inflation of 9.1% and the value of money decreases.
• B)there is deflation of 9.1% and the value of money increases.
• C)there is deflation of 10% and the value of money increases.
• D)there is inflation of 10% and the value of money decreases.

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Definitions:

Installment Payments

Payments made regularly over time to settle a debt, rather than paying the full amount at once.

Voucher Prepared

involves the creation of a document that authorizes a financial transaction and substantiates the details of that transaction.

Periodic System

An inventory system where updates to inventory levels are made periodically, as opposed to continuously.

Voucher Systems

A control and documentation system used in accounting to process and monitor transactions.