If the aggregate price level at time t is denoted by Pt, the inflation
If the aggregate price level at time t is denoted by Pt, the inflation rate from time t – 1 to t is defined as
A) πt = (Pt – Pt – 1)/Pt – 1.
B) πt = (Pt + 1 – Pt – 1)/Pt – 1.
C) πt = (Pt + 1 – Pt )/Pt.
D) πt = (Pt – Pt – 1)/Pt.
ANSWER
A
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