What does it mean if the annual inflation rate in a country was 8.1 percent?
A) The people experienced demand-push inflation.
B) The people saw a decline in gross domestic profit (GDP).
C) The people saw their purchasing power increase from what it was in the previous year.
D) The people saw their purchasing power decrease from what it was in the previous year.

Question

Quizplus · Accepted Answer

A high annual inflation rate of 8.1 percent means that the general price level of goods and services increased by that percentage, so the purchasing power of people decreased from what it was in the previous year. This means that people need more money to buy the same amount of goods and services as before, resulting in a decline in their standard of living.

What Does It Mean If the Annual Inflation Rate in a Country