If Inflation from Year 1 to Year 2 Is R

question 41

Multiple Choice

If inflation from year 1 to year 2 is r as a decimal, we express year-1 dollars in constant year-2 dollars using:

• A)D "year-2 dollars" = D(1 + r)"year-1 dollars"
• B)D "year-1 dollars" = D(1 - r)"year-2 dollars"
• C)D "year-2 dollars" = D(1 - r)"year-1 dollars"
• D)D "year-1 dollars" = D(1 + r)"year-2 dollars"

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