$$\begin{array} { | l | l | c | }
\hline { \text { Year } } & \text { Price index } & \begin{array} { l }
\text { Inflation rate } \
\text { (percent) }
\end{array} \
\hline 1 & 100 & \
\hline 2 & 117 & \text { A } \
\hline 3 & 125 & \text { B } \
\hline 4 & 120 & \text { C } \
\hline 5 & \mathrm { D } & 8.3 \
\hline 6 & 150 & \text { E } \
\hline
\end{array}$$
-In the table above, what price level belongs in space D?
A) 140
B) 125
C) 130
D) 145

Question

$$\begin{array} { | l | l | c | } 
\hline  { \text { Year } } & \text { Price index } & \begin{array} { l } 
\text { Inflation rate } \
\text { (percent) }
\end{array} \
\hline 1 & 100 & \
\hline 2 & 117 & \text { A } \
\hline 3 & 125 & \text { B } \
\hline 4 & 120 & \text { C } \
\hline 5 & \mathrm { D } & 8.3 \
\hline 6 & 150 & \text { E } \
\hline
\end{array}$$
-In the table above, what price level belongs in space D?
A) 140
B) 125
C) 130
D) 145

Quizplus · Accepted Answer

The inflation rate from year 4 to year 5 is 8.3%. To find the price level for year 5, calculate: 120 * (1 + 8.3/100) = 130.

-In the Table Above, What Price Level Belongs in Space