Final answer:
The statement is True; to convert a 1908 dollar figure into 2008 dollars, you divide the 2008 price level by the 1908 price level and then multiply by the 1908 dollar figure. This uses price indices and the concept of a base year to adjust for inflation over time.
Step-by-step explanation:
The statement that a dollar figure from 1908 is converted into 2008 dollars by dividing the 2008 price level by the 1908 price level, then multiplying by the 1908 dollar figure is True. This process is a way to adjust for changes in the price level over time to understand the value of money in different years. When calculating these adjustments, economists typically utilize price indices and define a base year. The index for the base year is set to 100, which simplifies the conversion of past monetary values to present-day equivalents.
By using a specific example: If the price index in 1908 was 20 and the price index in 2008 was 100, and you had $1 from 1908, you would adjust this amount by dividing the 2008 index (100) by the 1908 index (20), resulting in a multiplier of 5. Then, multiplying the 1908 dollar amount ($1) by this multiplier gives the adjusted value ($5) in 2008 dollars.