Suppose that the inflation rate for a given year was 3%.In that year,
A) all prices rose by 3%
B) prices on average rose by 3%
C) the economy was in an expansion
D) the economy was in a recession
E) the inflation rate was rising

Question

Quizplus · Accepted Answer

Inflation rate of 3% means that on average, prices increased by 3%. It does not necessarily mean that all prices increased by the same amount, nor does it indicate anything about the state of the economy (expansion or recession) or whether the inflation rate is rising or falling.

Suppose That the Inflation Rate for a Given Year Was