The price index of an economy was 1.25 in year 0. The general inflation rate between years 0 and 1 was -4%. What is the price index of that economy in year 1? O a. 1.20. Ob. 1.30. O. 1.00. O d. 1.10. O e. None of the alternatives is correct.
The price index of an economy was 1.25 in year 0. The general inflation rate between years 0 and 1 was -4%. What is the price index of that economy in year 1? O a. 1.20. Ob. 1.30. O. 1.00. O d. 1.10. O e. None of the alternatives is correct.
Chapter6: How Statisticians Measure Inflation
Section: Chapter Questions
Problem 6TY
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![The price index of an economy was 1.25 in year 0. The general inflation rate between years 0 and 1
was -4%. What is the price index of that economy in year 1?
O a. 1.20.
O b. 1.30.
O. 1.00.
O d. 1.10.
O e. None of the alternatives is correct.
Check](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3d9879a2-fb7e-4cd9-8c48-77dfb146fb98%2F30f7e4c8-9e2c-4095-a0d0-f936f17684ea%2F0mjglc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The price index of an economy was 1.25 in year 0. The general inflation rate between years 0 and 1
was -4%. What is the price index of that economy in year 1?
O a. 1.20.
O b. 1.30.
O. 1.00.
O d. 1.10.
O e. None of the alternatives is correct.
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