Suppose the price of gasoline has increased from $3 per gallon to $4 per gallon at the same time that the overall price index increased from 200 to 250 then you know that the inflation adjusted price of gasoline has

Question

Quizplus · Accepted Answer

The inflation-adjusted price of gasoline has increased because the price of gasoline rose by 33.3% (from $3 to $4), while the overall price index increased by only 25% (from 200 to 250). This means the price of gasoline increased more than general prices, indicating a real increase in the price of gasoline.

Suppose the Price of Gasoline Has Increased from $3 Per