Evaluating Price Stability
Two countries, A and B, report the following price index values over a three-year period:
- Country A: Year 1 = 100, Year 2 = 110, Year 3 = 121
- Country B: Year 1 = 150, Year 2 = 155, Year 3 = 175
Based on this data, which country experienced greater price stability during this period? In your response, first calculate the annual rate of price change for each country for Year 2 and Year 3. Then, use these calculations to support your conclusion about which country's economy was more stable in terms of its price level.
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