Example Calculation of the 2022 Inflation Rate

An economy's price index was 120 in Year 1, 150 in Year 2, and 180 in Year 3. Based on this data, which of the following statements accurately describes the trend in the rate of price level changes?

An economic analyst observes that a country's price index increased from 150 to 165 in one year, and then from 165 to 180 in the following year. The analyst concludes that because the index increased by the same absolute amount (15 points) each year, the rate of inflation was constant over the two years. Is the analyst's conclusion correct?

Economic Analysis of Freedonia

Calculating Annual Inflation

If a country's price index was 200 in one year and increased to 210 in the next year, the annual inflation rate for that period was ____%. (Please provide the numerical value only.)

Comparative Inflation Analysis

Evaluating Price Stability

Match each economic scenario, described by the change in a country's price index over a year, to its corresponding annual rate of price change.

An economist reports that a country experienced a 5% rate of inflation over the past year. If the price index is now 210, what was the price index one year ago?

An economy's price index was 200 in Year 1. In Year 2, the annual inflation rate was 10%. In Year 3, the annual inflation rate fell to 5%. Which of the following statements most accurately describes the general price level in this economy?

Example Calculation of the 2021 Inflation Rate