If a Country Had a CPI of 105

question 95

Multiple Choice

If a country had a CPI of 105.0 last year and a CPI of 102.0 this year,then

• A)the average prices of goods and services increased between last year and this year.
• B)the average prices of goods and services decreased between last year and this year.
• C)the average quality of goods and services decreased between last year and this year.
• D)there was an error when calculating the CPI this year.
• E)the quantity of consumer goods and services produced decreased between last year and this year.

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Definitions:

Negative Externalities

Costs incurred by third parties not directly involved in an economic activity, for example, pollution affecting non-participating individuals.

Economically Inefficient Outcomes

Situations where resources are not allocated optimally, resulting in lost potential utility or value.

Economists

Professionals who study the production, distribution, and consumption of goods and services.

Deregulation

The reduction or elimination of government power in a particular industry, usually with the aim of creating more competition within the industry.