If there are only two goods in the economy, one whose price rises by 1 percent and one by 6 percent, it is possible that inflation is:

Question

Quizplus · Accepted Answer

Inflation is a measure of the average price change across a basket of goods and services. If one good's price increases by 1% and another's by 6%, the average inflation rate could be between these two values, depending on their weight in the consumption basket, making 2% a possible average inflation rate.

If There Are Only Two Goods in the Economy, One