Which statement best represents the purpose for measuring annual inflation (or deflation)?
A) The main purpose is to find out how much the price of gasoline has increased from year to year.
B) The main purpose is to find out whether more goods have increased (or decreased)in price compared to the number of goods whose price has decreased (or increased).
C) The main purpose is to find out whether the overall cost of living has changed.
D) The main purpose is to find out whether the economy has produced more goods this year than last year.
E) The main purpose is to find out whether the cost of entertainment is more expensive (or cheaper)this year than last year.

Question

Quizplus · Accepted Answer

The purpose of measuring annual inflation (or deflation) is to track changes in the overall cost of living. This allows individuals and government entities to make informed decisions related to economic policies, wages, and expenses. The other answer choices do not reflect the primary purpose of measuring inflation.

Which Statement Best Represents the Purpose for Measuring Annual Inflation