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The Difference Between an Absolute Price and a Relative Price

Question 51

Multiple Choice

The difference between an absolute price and a relative price is that:


A) absolute prices are based on costs of production,relative prices are based on market exchange.
B) absolute prices are in terms of currency,relative prices are in terms of another good.
C) absolute prices are in terms of another good,relative prices are in terms of currency.
D) absolute prices never change,relative prices change with inflation.

Correct Answer:

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