If the Price Level Increases from 200 in Year 1

question 24

Multiple Choice

If the price level increases from 200 in year 1 to 220 in year 2, the rate of inflation from year 1 to year 2 is ________.

• A) 20 percent
• B) 10 percent
• C) 11 percent
• D) 120 percent

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Definitions:

Mutual Mistake

A contract law term where all parties involved have a mistaken understanding about a crucial aspect of the agreement.

Basic Assumption

A fundamental belief or principle that is accepted as true without need for proof, underlying the basis of an argument or theory.

Material Effect

An impact significant enough to influence a decision, outcome, or valuation, often used in legal and financial contexts.

Rescind

means to revoke, cancel, or repeal a contract, decision, or agreement.