If the Price Index Is P1 in Year 1 and P2

question 99

Multiple Choice

If the price index is P1 in year 1 and P2 in year 3,the average inflation rate per year over this period is calculated as

• A)(P2 - P1)× (100/2).
• B)[(P2 - P1)/P1] × 100.
• C)[(P2 - P1)/P1] × [100/2].
• D)[(P1 - P2)/P2] × 100.
• E)[(P1 - P2)/P2] × [100/2].

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