1. Which of the following regarding inflation is true? (a) If CPI changes from 100 to 105 in a year and then changes from 105 to 100 in the following year, then the initial rate of price increase is greater than the following rate of price decrease. (b) If CPI doubles in one year and then remains at that high level for five years, it means that the country suffers high inflation for five years. (c) If CPI is cut by half in one year, it means that the deflation rate of that year is 0.5%. ( d) Increasing CPI means that money is getting more and more valuable. (e) None of the above.

1. Which of the following regarding inflation is true? (a) If CPI changes from 100 to 105 in a year and then changes from 105 to 100 in the following year, then the initial rate of price increase is greater than the following rate of price decrease. (b) If CPI doubles in one year and then remains at that high level for five years, it means that the country suffers high inflation for five years. (c) If CPI is cut by half in one year, it means that the deflation rate of that year is 0.5%. ( d) Increasing CPI means that money is getting more and more valuable. (e) None of the above.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter22: International Financial Management

Section: Chapter Questions

Problem 6P

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