What does it mean if the annual inflation rate in a country was 8.1 percent?
A) The people experienced demand-push inflation.
B) The people saw a decline in gross domestic product (GDP).
C) The people saw their purchasing power increase from what it was in the previous year.
D) The people saw their purchasing power decrease from what it was in the previous year.

Question

Quizplus · Accepted Answer

An annual inflation rate of 8.1 percent means that prices on average increased by 8.1 percent from the previous year. This means that the purchasing power of the people decreased from what it was in the previous year, as they can buy fewer goods and services with the same amount of money.

What Does It Mean If the Annual Inflation Rate in a Country