Asked by Bertrand Veronique on Apr 24, 2024
Which of the following is the significance of a country's price index?
A) It helps in measuring changes in the nominal interest rate in a country.
B) It helps in measuring the total disposable income of a country.
C) It helps in determining a country's real GDP each year.
D) It helps in measuring changes in the prices of only luxury goods.
E) It helps in measuring the demand for goods and services exported by a country.
Price Index
A measure that examines the weighted average of prices of a basket of consumer goods and services, used to estimate inflation.
Real GDP
Real Gross Domestic Product (Real GDP) is an inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year, providing a more accurate representation of an economy's size and growth rate.
- Understand the importance and methodology of computing price indices and their function in evaluating economic shifts.
Learning Objectives
- Understand the importance and methodology of computing price indices and their function in evaluating economic shifts.