Using the notation P_tto designate this period's price level and P_t_-₁to designate last period's price level, the formula for measuring the inflation rate from last period to this period is A)[(P_t_-₁- P_t)/ P_t_-₁] × 100. B)[(P_t- P_t_-₁)/ P_t_-₁] × 100. C)[(P_t_-₁- P_t)/ P_t] × 100. D)[(P_t- P_t_-₁)/ P_t] × 100.

Question

Quizplus · Accepted Answer

The inflation rate is calculated as the percentage change in the price level from one period to the next. The formula for measuring the inflation rate from last period to this period is [(P_t- P_t_-₁)/ P_t_-₁] × 100.

Using the Notation Pt to Designate This Period's Price Level

Using the Notation P_tto Designate This Period's Price Level