The price index in the first year is 110,in the second year is 100,and in the third year is 96.The economy experienced
A)9.1 percent deflation between the first and second years,and 4 percent deflation between the second and third years.
B)9.1 percent deflation between the first and second years,and 9.6 percent deflation between the second and third years.
C)10 percent deflation between the first and second years,and 4 percent deflation between the second and third years.
D)10 percent deflation between the first and second years,and 8.7 percent deflation between the second and third years.

Question

Quizplus · Accepted Answer

The price index decreased from 110 to 100 between the first and second years, a decrease of (110-100)/110 * 100 = 9.1%. Between the second and third years, the price index decreased from 100 to 96, a decrease of (100-96)/100 * 100 = 4%.

The Price Index in the First Year Is 110,in the Second