The inflation rate is calculated
A)by determining the change in the price index from the preceding period.
B)by adding up the price increases of all goods and services.
C)by computing a simple average of the price increases for all goods and services.
D)by determining the percentage increase in the price index from the preceding period.

Question

Quizplus · Accepted Answer

The inflation rate is determined by calculating the percentage increase in the price index from the preceding period. This is generally done using a consumer price index (CPI) or producer price index (PPI), which track changes in prices over time for a specific basket of goods and services. By comparing the index from one period to the next, economists can determine the rate of inflation.

The Inflation Rate Is Calculated