If the Price Index Is P₁ in One Year and P₂

question 85

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)x 100
• B)[(P₁ - P₂)/P₂] x 100
• C)[(P₂ - P₁)/P₁] x 100
• D)(P_2/P₁)x 100
• E)(P_1/P₂)x 100

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Definitions:

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