If the price level for the last three months has been 112, 125, and 126, we would say
A) inflation has been constant over the three months.
B) inflation was more rapid between the first and second month than between the second and third month.
C) inflation was less rapid between the first and second month than between the second and third month.
D) inflation has steadily increased over the three months.

Question

Quizplus · Accepted Answer

The price level increased from 112 to 125 between the first and second month, and from 125 to 126 between the second and third month. This indicates a more rapid increase in the price level (and thus inflation) between the first and second month than between the second and third month.

If the Price Level for the Last Three Months Has