If the price level at the end of year 1 is 150 and the price level at the end of year 2 is 160, the inflation rate in year 2 is 6.67%.

Question

Quizplus · Accepted Answer

Inflation rate is calculated by dividing the change in price level by the initial price level and then multiplying by 100. 
Hence, the inflation rate in year 2 would be [(160-150)/150] * 100 = 6.67% which is true according to the question statement.

If the Price Level at the End of Year 1