When the CPI Increases from One Year to the Next

question 72

Multiple Choice

When the CPI increases from one year to the next:

• A) the cost of living has decreased.
• B) deflation has occurred.
• C) people need to spend more money to buy the same amount of goods as the previous year.
• D) All of these statements are true.

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Definitions:

Music Downloads

Digital files of music tracks that can be legally or illegally downloaded from the internet to a computer or mobile device.

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Government-imposed limits on the amount of sugar that can be imported or produced, often to stabilize domestic prices.

Consumer Surplus

The disparity between what consumers are prepared to pay for a product or service and the actual amount they end up paying.

Consumer Surplus

The gap between the total price consumers are ready to pay for a good or service and what they actually spend on it.