The Equation E_¥/£ = 100 Means That

question 93

Multiple Choice

The equation E_¥/£ = 100 means that:

• A) 1 yen buys 10 pounds.
• B) 0.1 yen buys 1 pound.
• C) 100 yen buy 1 pound.
• D) 0.01 yen buys 1 pound.

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Definitions:

Francs

A former unit of currency in France and other countries, replaced by the Euro in many instances.

Utility Function

An equation that assigns numerical values to different combinations of goods and services, capturing the level of satisfaction or preference that an individual derives from these combinations.

Paasche Price Index

An economic measure that calculates the change in the level of prices of a basket of goods and services purchased in the current period, compared to a base period, using the quantities bought in the current period.

Laspeyres Price Index

An economic measure that calculates the change in the cost of acquiring a fixed basket of goods and services, based on the prices of those goods and services in a base period.