In China,suppose that the price level was 100 in 2011,110 in 2012,and 120 in 2013.Over these three years,
A) the inflation rate accelerated.
B) inflation did not occur.
C) prices were stable.
D) the inflation rate was positive.

Question

Quizplus · Accepted Answer

As the price level increased from 100 to 120 over three years, it indicates that there was inflation. The inflation rate can be calculated by taking the change in the price level and dividing by the initial price level. For example, between 2011 and 2012, the inflation rate would be (110-100)/100 = 0.1 or 10%. Similarly, between 2012 and 2013, the inflation rate would be (120-110)/110 = 0.091 or approximately 9.1%. Therefore, the inflation rate was positive over these three years.

In China,suppose That the Price Level Was 100 in 2011,110