Question
If the price level increased from 120 to 144, then what was the inflation rate?
a. 25 percent
b. 17 percent
c. 20 percent
d. 24 percent
a. 25 percent
b. 17 percent
c. 20 percent
d. 24 percent
Answers
GPT-4o mini
To calculate the inflation rate, you can use the formula:
\[
\text{Inflation Rate} = \frac{\text{New Price Level} - \text{Old Price Level}}{\text{Old Price Level}} \times 100
\]
In this case, the old price level is 120, and the new price level is 144. Plugging in the values:
\[
\text{Inflation Rate} = \frac{144 - 120}{120} \times 100 = \frac{24}{120} \times 100 = 20\%
\]
So the inflation rate is **20 percent (c)**.
\[
\text{Inflation Rate} = \frac{\text{New Price Level} - \text{Old Price Level}}{\text{Old Price Level}} \times 100
\]
In this case, the old price level is 120, and the new price level is 144. Plugging in the values:
\[
\text{Inflation Rate} = \frac{144 - 120}{120} \times 100 = \frac{24}{120} \times 100 = 20\%
\]
So the inflation rate is **20 percent (c)**.