If the price level increases from 200 in year 1 to 220 in year 2,the rate of inflation from year 1 to year 2 is

Question

Quizplus · Accepted Answer

To calculate the rate of inflation, we need to find the percentage increase in the price level from year 1 to year 2. 
Using the formula: (Year 2 Price - Year 1 Price) / Year 1 Price x 100%
we get: (220-200)/200 x 100% = 10%
Therefore, the rate of inflation from year 1 to year 2 is 10%. Option B is correct. Options A, C, and D are all incorrect.

If the Price Level Increases from 200 in Year 1