Suppose that the price level in China was 100 in 2007, 110 in 2008, 120 in 2009, and 130 in 2011.Over this time period,
A)the inflation rate increased.
B)zero inflation occurred.
C)the inflation rate was positive.
D)the inflation rate decreased.
E)Both C and D are correct.

Question

Quizplus · Accepted Answer

The inflation rate was positive as the price level increased each year, indicating inflation. However, the rate of increase (inflation rate) from year to year varied, and without specific calculations, it's implied that the rate of inflation decreased at some point given the consistent but not accelerating increase in price levels.

Suppose That the Price Level in China Was 100 in 2007