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To calculate the price level, economists begin with the concept of a:
ABasket of goods
BBundle of taxes
CSample of firms
DRegister of banks
Answer & Solution
Correct answer: A. Basket of goods
1. Measuring the price level needs a fixed shopping list.
2. Economists combine prices of many goods into a single price level.
3. They begin with the concept of a basket of goods and services.
4. It consists of the different items people typically buy.
_Source: OpenStax Principles of Macroeconomics for AP Courses 2e (CC BY 4.0), Ch 8 'Inflation'_
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