If the price level in the year 2000 is 100, and the price level in the year 2001 is 110, what is the inflation rate in 2001?
A) 100 percent
B) 110 percent
C) 10 percent
D) 9 percent

Question

Quizplus · Accepted Answer

The inflation rate is calculated as the percentage increase in the price level from 2000 to 2001. The calculation is (110-100)/100 x 100 = 10%, so the inflation rate in 2001 is 10%. Option C is the correct answer. Options A and B are incorrect as they exceed 100%, which is not possible for an inflation rate. Option D is incorrect because it does not take into account the starting price level of 100.

If the Price Level in the Year 2000 Is 100