DECA+ Business Management and Administration Practice Exam

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What is an example of a method used to assess the impact of inflation?

Consumer Satisfaction Index
Price Indexing
Cost-Benefit Analysis
Market Share Analysis

The correct answer is: Price Indexing

Price indexing is a method used to assess the impact of inflation by comparing the current price levels of a set basket of goods and services to their prices at previous points in time. This allows economists and analysts to measure how much prices have increased over a certain period, reflecting the rate of inflation. Price indexes, such as the Consumer Price Index (CPI), provide valuable insights into the overall health of the economy, purchasing power of consumers, and the effectiveness of economic policies. The other methods mentioned do not specifically measure the impact of inflation on prices. The Consumer Satisfaction Index focuses on consumer feedback rather than economic metrics. Cost-Benefit Analysis evaluates the monetary value of benefits compared to costs for project decisions but does not directly assess inflation. Market Share Analysis deals with a company's performance relative to its competitors and does not provide insights into price changes over time.