If the price index is P₁ in year 1 and P₂ in year 3,the average inflation rate per year over this period is calculated as A)(P₂ - P₁)× (100/2). B)[(P₂ - P₁)/P₁] × 100. C)[(P₂ - P₁)/P₁] × [100/2]. D)[(P₁ - P₂)/P₂] × 100. E)[(P₁ - P₂)/P₂] × [100/2].

Question

Quizplus · Accepted Answer

The average inflation rate per year is calculated by finding the percentage change in the price index over the period and then dividing by the number of years.

If the Price Index Is P1 in Year 1 and P2

If the Price Index Is P₁ in Year 1 and P₂