The table below shows the price index for China starting in 2000. $$\begin{array} { | l | l | }
\hline \text { Year } & \text { Price Index } \
\hline 2000 & 100.0 \
\hline 2001 & 100.73 \
\hline 2002 & 99.95 \
\hline 2003 & 101.12 \
\hline 2004 & 105.06 \
\hline 2005 & 106.95 \
\hline 2006 & 108.52 \
\hline
\end{array}$$
Which of the following statements correctly describe the behavior of prices in China?
A) The inflation rate between 2005 and 2006 was 14.4 percent.
B) China experienced a high price level and high inflation.
C) Inflation reached 73% between the base year and 2001.
D) The cost of the CPI basket decreased in 2002.

Question

The table below shows the price index for China starting in 2000. $$\begin{array} { | l | l | } 
\hline \text { Year } & \text { Price Index } \
\hline 2000 & 100.0 \
\hline 2001 & 100.73 \
\hline 2002 & 99.95 \
\hline 2003 & 101.12 \
\hline 2004 & 105.06 \
\hline 2005 & 106.95 \
\hline 2006 & 108.52 \
\hline
\end{array}$$
Which of the following statements correctly describe the behavior of prices in China?
A) The inflation rate between 2005 and 2006 was 14.4 percent.
B) China experienced a high price level and high inflation.
C) Inflation reached 73% between the base year and 2001.
D) The cost of the CPI basket decreased in 2002.

Quizplus · Accepted Answer

The price index decreased from 100.73 in 2001 to 99.95 in 2002, indicating a decrease in the cost of the CPI basket.

The Table Below Shows the Price Index for China Starting