If the Price Index Is P1 in One Year and P2

question 6

Multiple Choice

If the price index is P1 in one year and P2 in the next year,the inflation rate from one year to the next is calculated as

• A)(P2 - P1)× 100.
• B)(P2/P1)× 100.
• C)(P1/P2)× 100.
• D)[(P2 - P1)/P1] × 100.
• E)[(P1 - P2)/P2] × 100.

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