What best defines the inflation rate?
A) the price level
B) the change in the price level
C) the price level divided by the price level in the previous period
D) the percentage change in the price level from the previous period

Question

Quizplus · Accepted Answer

The inflation rate is defined as the percentage change in the price level from the previous period. Option D provides the correct definition. Option A defines the price level, not the inflation rate. Option B is close but not accurate, as it is specifically the change in the price level. Option C is incorrect, as it divides the current price level by the previous price level, rather than calculating the change.

What Best Defines the Inflation Rate