If the Price Index for a Particular Year Is 75

question 117

Multiple Choice

If the price index for a particular year is 75, it implies that ________.

• A) prices have increased by 7.5% over the base year
• B) prices have increased by 0.75% over the base year
• C) prices have decreased by 0.25% compared to the base year
• D) prices have decreased by 25% compared to the base year

Understand the roles of firm entry and exit in determining market equilibrium in the long run.

Analyze the impact of external market forces on equilibrium points and firm behavior.

Understand the difference between diminishing marginal productivity and its effect on total product versus total cost.

Grasp the basic concept of profit calculation and the distinction between total revenue and total cost.

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Definitions:

Appreciates

Describes when the value of an asset increases over time in comparison to its original cost.

Eurobond

A bond that is issued in a foreign currency, different from the currency of the country or market where it is being issued.

Exchange Rate Risk

The potential loss or gain that may arise due to changes in the exchange rate of two currencies.

Euro

The official currency of 19 out of the 27 European Union countries, which forms the Eurozone.