Suppose the price index was 105 in 2007, 115.5 in 2008, and the inflation rate was lower between 2008 and 2009 than it was between 2007 and 2008. This means that

Question

Quizplus · Accepted Answer

The inflation rate between 2007 and 2008 was (115.5 - 105) / 105 = 10%. A lower inflation rate between 2008 and 2009 means the price index increase was less than 10%, so it must be less than 115.5 * 1.10 = 127.05.

Suppose the Price Index Was 105 in 2007, 115