The table given below lists the average price level in a country for four consecutive years. Table 7.2
Refer to Table 7.2.What was the purchasing power of the dollar in 1995 relative to the base year 1992?
A)0.54
B)0.72
C)0.91
D)0.97
E)1.93

Question

The table given below lists the average price level in a country for four consecutive years. Table 7.2
 Refer to Table 7.2.What was the purchasing power of the dollar in 1995 relative to the base year 1992?
A)0.54 
B)0.72 
C)0.91 
D)0.97 
E)1.93

Quizplus · Accepted Answer

To calculate the purchasing power of the dollar in 1995 relative to the base year 1992, we divide the average price level of 1995 by the average price level of 1992:
Purchasing Power of Dollar in 1995 = (Price level in 1995/Price level in 1992)
= 114/125
= 0.912
Therefore, the answer is choice C, 0.91.

The Table Given Below Lists the Average Price Level in a Country