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WAEC Economics 2012 Question 39

Question 39

Money and Inflation

A price index as a statistic, measures

  1. A.how the value of money changes over time.
  2. B.the volume of currency in the economy.
  3. C.the exchange rate of a country's currency.
  4. D.the composition of goods and services.
Show the answer and explanation

Answer: A (how the value of money changes over time.)

Explanation

A price index tracks changes in the general price level, i.e. in the value of money.