What Does It Mean to Say That the Inflation Rate

question 2

Multiple Choice

What does it mean to say that the inflation rate last year was 5%?

• A)All prices are 5% more at the end of the year than they were at the beginning of the year.
• B)The price of specific products increased 5% between the beginning and the end of the year.
• C)On average,a typical basket of goods costs 5% more at the end of the year than it did at the beginning of the year.
• D)The general purchasing power of the dollar has increased 5% between the beginning of the year and the end of the year.