Chapter 22: Q 13 (page 553)
What is the difference between the price level and the rate of inflation?
we can say that inflation is basically a percentage change in price level.
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Over the last century, during what periods was the U.S. inflation rate highest and lowest?
Why do economists use index numbers to measure the price level rather than dollar value of goods?
Inflation rates, like most statistics, are imperfect measures. Can you identify some ways that the inflation rate for fruit does not perfectly capture the rising price of fruit?
If inflation rises unexpectedly by , would a state government that had recently borrowed money to pay for a new highway benefit or lose?
The index number representing the price level changes from 110 to 115 in one year, and then from 115 to 120 the next year. Since the index number increases by five each year, is five the inflation rate each year? Is the inflation rate the same each year? Explain your answer.
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