The price of a first-class stamp in 1957 was 3 cents, and it is 47 cents in 2016. From this we know that
A) both the relative and the absolute price of first-class stamps increased from 1957 to 2016.
B) the money price of first-class stamps increased from 1957 to 2016 but the absolute price of first-class stamps stayed constant.
C) the money price of first-class stamps increased from 1957 to 2016 and the relative price of first-class stamps decreased.
D) the money price of first-class stamps increased from 1957 to 2016, but we can't tell if the relative price of first-class stamps increased or decreased without more information.

Question

Quizplus · Accepted Answer

The money price of first-class stamps clearly increased from 3 cents to 47 cents. However, without information on how the prices of other goods and services or the purchasing power of money changed over the same period, we cannot determine if the relative price (the price in comparison to other goods or services) of first-class stamps increased or decreased.

The Price of a First-Class Stamp in 1957 Was 3