Suppose the Price Index in 2004 Was 110;in 2005 It

question 61

Multiple Choice

Suppose the price index in 2004 was 110;in 2005 it was 120;and in 2006 it was 125.Which of the following statements is correct?

• A)The economy experienced inflation between 2004 and 2005, and again between 2005 and 2006.
• B)The inflation rate was positive between 2004 and 2005, and it was negative between 2005 and 2006.
• C)The inflation rate was higher between 2005 and 2006 than it was between 2004 and 2005.
• D)All of the above are correct.