If the price level is 100 in 2000 and 105 in 2001, the inflation rate is
A) 105%.
B) 100%.
C) 50%.
D) 5%.

Name: If the price level is 100 in 2000 and 105 in 2001, the inflation rate is A) 105%. B) 100%. C) 50%. D) 5%.
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Question

Quizplus · Accepted Answer

The inflation rate can be calculated using the following formula:

Inflation rate = (New price level - Old price level) / (Old price level) x 100%

Using the given values:

Inflation rate = (105 - 100) / (100) x 100%
Inflation rate = 5%

Therefore, the correct answer is D) 5%.

If the Price Level Is 100 in 2000 and 105