The table below shows the price index for Zimbabwe starting in 2000.

Www)econstats.com
The data show that
A) the inflation rate between the base year and 2001 is 73.4 percent.
B) new goods bias and quality change bias are responsible for most of Zimbabwe's inflation.
C) the inflation rate between 2005 and 2006 was 319.2 percent.
D) while Zimbabwe experienced a high price level, it did not experience high inflation.

Question

The table below shows the price index for Zimbabwe starting in 2000.

Www)econstats.com
The data show that
A) the inflation rate between the base year and 2001 is 73.4 percent. 
B) new goods bias and quality change bias are responsible for most of Zimbabwe's inflation. 
C) the inflation rate between 2005 and 2006 was 319.2 percent. 
D) while Zimbabwe experienced a high price level, it did not experience high inflation.

Quizplus · Accepted Answer

The price index shows an increase from 100 in the base year (2000) to 173.4 in 2001. This corresponds to an increase of 73.4 percent, indicating a high inflation rate. New goods bias and quality change bias are not mentioned in the data. The inflation rate between 2005 and 2006 is indeed 319.2 percent, but this is not the only period of high inflation. Therefore, option C is not the best choice. Option D is incorrect because the data clearly indicate a high inflation rate for Zimbabwe.

The Table Below Shows the Price Index for Zimbabwe Starting