Suppose the Value of the Cpi Is 1

Question 89
Multiple Choice

Suppose the value of the CPI is 1.100 in year one,1.122 in year two,and 1.133 in year three.Assume also that the price of computers increases by 3% between year one and year two,and by another 3% between year two and year three.The price level is increasing,the inflation rate is _______,and the relative price of computers is _________. A)decreasing;increasing B)increasing;increasing C)decreasing;decreasing D)increasing;decreasing