The price index in the first year is 150;in the second year it is 160;and in the third year it is 165.Which of the following statements is correct?

Question

Quizplus · Accepted Answer

A) The price index increased from 150 to 160 between the first and second year, and then increased again from 160 to 165 between the second and third year, indicating that the price level was higher in the second year than in the first year, and it was higher in the third year than in the second year. 
B) The inflation rate between the first and second years can be calculated as [(160-150)/150] x 100% = 6.67%, indicating a positive inflation rate. Similarly, the inflation rate between the second and third years can be calculated as [(165-160)/160] x 100% = 3.13%, indicating a positive inflation rate. 
C) The inflation rate in the first case (between first and second years) is higher than the inflation rate in the second case (between second and third years), indicating that the inflation rate was lower between the second and third years than it was between the first and second years. 
Therefore, all three statements are correct, and the answer is D.

The Price Index in the First Year Is 150;in the Second