The inﬂation rate is measured as _____.
A) (price index in current year - price index in previous year)/price index in previous year
B) price index in current year/price index in previous year
C) price index in previous year/price index in current year
D) price index in previous year/(price index in current year - price index in previous year)

Question

Quizplus · Accepted Answer

The inflation rate is calculated by taking the difference between the price index of the current year and the previous year, then dividing by the price index of the previous year, and finally multiplying by 100 to get a percentage. This formula accurately reflects the percentage change in price index over a year, which is what the inflation rate measures.

The Inﬂation Rate Is Measured as _____