You look up the NZ CPI and the US CPI for the December 2015 quarter and find the NZ value is 1150 and the US value is 115. From this you can conclude Select one: a. that the NZ price level is ten times that of the US. b. there is no difference in the price level of the two nations. c. nothing without having another value for each country. d. that the price level in the US is lower than the NZ price level.

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A:

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Price Index Analysis

A price index is used to measure inflation in most countries and is focused on a collection of products and services significant to a particular economic segment. It is a measure of changing prices over some time. The price index is a scale or a valuable device to measure changes in price levels. The economists randomly choose a certain year as the base year to convert the amount spent on a basket into a price index.