Describe the inflation rate trend in the inflation rate graph provided. FRED- Consumer Price Index for All Urban Consumers: All tems in U.S. City Average2.52.01.51.0050.045-1.0Q2 20199 201 3סQ4 2019Q1 2020Q2 2020Q3 202004 2020Q1 2021Q2 2021Q3 2021Q4 2021Percent Change of (Index 1982-1984-100)

Answered: Describe the inflation rate trend in…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Describe the inflation rate trend in the inflation rate graph provided.

FRED
- Consumer Price Index for All Urban Consumers: All tems in U.S. City Average
2.5
2.0
1.5
1.0
05
0.0
45
-1.0
Q2 2019
9 201 3ס
Q4 2019
Q1 2020
Q2 2020
Q3 2020
04 2020
Q1 2021
Q2 2021
Q3 2021
Q4 2021
Percent Change of (Index 1982-1984-100)

Expert Solution

Step 1

Inflation refers to an increase in the prices of goods and services in an economy over a period of time. This implies a rise in the general price level in an economy. There are three trends of inflation in an economy:

Increasing: In this, rate of inflation increases over a period of time
Declining: In this, rate of inflation decreases over a period of time
Stable: In this, rate of inflation remains constant or little change over a period of time.

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