27 "
© 2014 Pearson Canada Inc."- If the aggregate price level at time t is denoted by Pt, the inflation rate from time t - 1 to t is
defined as
A) = ( - )/
B) = (Pt + 1 - Pt - 1 ) /Pt - 1
C) = (Pt + 1 - Pt) /Pt
D) = (Pt - Pt - 1 ) /Pt
Answer: A
Diff: 3 Type: MC Page Ref: 20
Skill: Applied
Objective List: Appendix: Defining Aggregate Output, Income, the Price Level, and the
Inflation Rate
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 ____.
A) 20 percent
B) 10 percent
C) 11 percent
D) 120 percent
Answer: B
Diff: 3 Type: MC Page Ref: 19
Skill: Applied
Objective List: Appendix: Defining Aggregate Output, Income, the Price Level, and the
Inflation Rate
If the CPI is 120 in 2002 and 180 in 2012, then between 2002 and 2012, prices have
increased by ____.
A) 180 percent
B) 80 percent
C) 60 percent
D) 50 percent
Answer: D
Diff: 2 Type: MC Page Ref: 20
Skill: Applied
Objective List: Appendix: Defining Aggregate Output, Income, the Price Level, and the
Inflation Rate