The price index was 150 in the first year,142.5 in the second year,and 138.2 in the third year.The economy experienced
A)5.0 percent deflation between the first and second years,and 3.0 percent deflation between the second and third years.
B)7.5 percent deflation between the first and second years,and 4.3 percent deflation between the second and third years.
C)5.3 percent inflation between the first and second years,and 4.1 percent inflation between the second and third years.
D)7.5 percent inflation between the first and second years,and 4.3 percent inflation between the second and third years.

Question

Quizplus · Accepted Answer

The price index decreased from 150 to 142.5 between the first and second years, a decrease of (150-142.5)/150 * 100 = 5.0%. Between the second and third years, the price index decreased from 142.5 to 138.2, a decrease of (142.5-138.2)/142.5 * 100 = 3.0%.

The Price Index Was 150 in the First Year,142