If the aggregate price level at time t is denoted by , the inflation rate from time to is defined as:
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1 mark, −0.33MacroeconomicsNational income accountingPrice indices: the GDP deflator and CPIEasyabout 1 min
UoH 2021 Question 96: National income accounting
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If the aggregate price level at time t is denoted by CPIₜ, the inflation rate from time t-1 to t is defined as: (A) πₜ = (CPIₜ - CPIₜ₋₁) / CPIₜ₋₁ (B) πₜ = (CPIₜ₊₁ - CPIₜ₋₁) / CPIₜ₋₁ (C) πₜ = (CPIₜ₊₁ - CPIₜ) / CPIₜ₊₁ (D) πₜ = (CPIₜ - CPIₜ₋₁) / CPIₜ
Also written as: If the aggregate price level at time t is denoted by CPI_t, the inflation rate from time t-1 to t is defined as:
National income accounting has come up 132 times in 6 exams since 2010.
What this question tests
This question is on Price indices: the GDP deflator and CPI, part of National income accounting in Macroeconomics.
How the price level and inflation are measured, and how the deflator differs from the CPI.
TestStop has 18 past-paper questions on this subtopic.
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Question from the UoH 2021 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.