If the price level rises from 100 to 110 then the inflation rate is
A) 1.0 percent.
B) 10.0 percent.
C) 100 percent.
D) 110 percent.
E) None of the above answers is correct.

Question

Quizplus · Accepted Answer

Inflation rate is the percentage increase in the price level from one period to another. Here, the price level has increased from 100 to 110, which is a 10 percent increase (110-100/100 x 100 = 10%). Therefore, the inflation rate is 10.0 percent.

If the Price Level Rises from 100 to 110 Then