
The rate of inflation.

Answer to Problem 2SQ
Option 'd’ is correct.
Explanation of Solution
Option (d):
The rate of inflation is calculated as follows:
The calculated value of the rate of inflation is approximately equal to the given value. Thus, option 'd' is correct.
Option (a):
The calculated value of the rate of inflation is less than the given value of 325 percent. Thus, option 'a' is incorrect.
Option (b):
The calculated value of the rate of inflation is less than the given value of 25 percent. Thus, option ‘b’ is incorrect.
Option (c):
The calculated value of the rate of inflation is greater than the given value of 5 percent. Thus, option ‘c’ is incorrect.
Inflation: Inflation refers to a continuous increase in the average
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Chapter 7 Solutions
MACROECONOMICS FOR TODAY-W/LMS MINDTAP
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