Suppose that in 2011 the chain-weighted price index for GDP in Estonia is 220 and the chain-weighted price index in Lithuania is 160. In 2012 the price index in Estonia is 242 and the price index in Lithuania is 180. You could conclude that
A) Estonia is a more expensive place to live than Lithuania.
B) Lithuania is a more expensive place to live than Estonia.
C) Estonia's rate of inflation is higher than Lithuania's.
D) Lithuania's rate of inflation is higher than Estonia's.

Question

Quizplus · Accepted Answer

The increase in the chain-weighted price index from 2011 to 2012 is greater in Estonia (10%) than in Lithuania (12.5%). Therefore, the rate of inflation is higher in Estonia.

Suppose That in 2011 the Chain-Weighted Price Index for GDP