Which of the following is true of price indexes?
I.They indicate what is happening to the general level of prices.
II.They are used to estimate the rate of inflation or deflation.
III.They are used to convert nominal values to real values, so comparisons can be made across time.

Question

Quizplus · Accepted Answer

Price indexes serve all three purposes listed in the statements. They indicate the general level of prices, estimate the rate of inflation or deflation, and convert nominal values to real values for comparisons across time. Therefore, all three statements are true.

Which of the Following Is True of Price Indexes