Answer to Question #5007 in Macroeconomics for simone

Question

Suppose that the CPI for a particular economy rose from 110 to 120 in year 1, 120 to 130 in year 2, and 130 to 140 in year 3. We could conclude that this economy is experiencing:

a.accelerating inflation.
b.deflation
c.disinflation.
d.a constant rate of inflation.

Answer 1

Answer is d. a constant rate of inflation.
Because
∆CPI₁= ∆CPI₂= ∆CPI₃=10