If the price level doubled in a 23-year period, we can conclude that the average annual rate of
inﬂation over that period was about 3 percent.

Question

Quizplus · Accepted Answer

To calculate the average annual rate of inflation, we can use the rule of 72, which states that we can divide the number of years it takes for a price level to double by 72 to get the average annual rate of inflation. In this case, 72 divided by 23 is approximately 3.13, so we can conclude that the average annual rate of inflation was about 3 percent. Therefore, the statement is true.

If the Price Level Doubled in a 23-Year Period, We