If spending growth is 3% and real GDP growth is 2%,what is the inflation rate?
A) 3%
B) 5%
C) 1%
D) 2%

Name: If spending growth is 3% and real GDP growth is 2%,what is the inflation rate? A) 3% B) 5% C) 1% D) 2%
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Question

Quizplus · Accepted Answer

Inflation rate can be calculate by subtracting the real GDP growth from the spending growth. Here, spending growth is 3% and real GDP growth is 2%, so the inflation rate is 3% - 2% = 1%. Therefore, option C is the correct answer.

If Spending Growth Is 3% and Real GDP Growth Is