CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

Suppose that the price level is 100 in 2005, 115 in 2006, and 125 in 2007. Over the period from 2005 to 2007, we can say that the price level has ______ while the inflation rate has ______.
A. increased; increased
B. increased; decreased
C. increased; remained constant
Explanation: The price level is clearly increasing over this period. The inflation rate is 15% in 2006 and 8.7% in 2007. Thus, the inflation rate is decreasing. This is an example of disinflation.

User Contributed Comments 2

User Comment
StanleyMo gosh..inflation rate, not inflation
LIEJON good one!!! Got me..
You need to log in first to add your comment.