The Consumer Price Index Is the

question 22

Multiple Choice

The consumer price index is the

• A)cost of a market basket of goods and services typically consumed in the base year.
• B)cost of a market basket of goods and services typically consumed in the current period.
• C)average of the prices of the goods and services purchased by a typical urban family of four.
• D)average of the prices of new final goods and services produced in the economy over a period of time.

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Definitions:

Equity

The value of an asset after deducting the amount of liabilities or the ownership interest in a firm.

Call Contract

A financial contract that gives the holder the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specified price within a specific time period.

Option Contract

An agreement that gives the owner the right, but not the obligation, to buy or sell a specific asset at a specific price for a set period of time.

Put Options

Financial contracts giving the owner the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price within a specified time frame.