Comparing changes in relative prices is more useful than examining average prices in
A)Determining the redistribution of income.
B)Determining the inflation rate.
C)Deflating nominal income.
D)Determining if there is deflation.

Question

Quizplus · Accepted Answer

Changes in relative prices can significantly impact the distribution of income among individuals and sectors by altering the purchasing power and profitability of different goods and services. This can lead to a redistribution of income as some sectors or individuals gain at the expense of others.

Comparing Changes in Relative Prices Is More Useful Than Examining