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Well, the inflation rate from Year 1 to year 2 is (130-120)/120=8.3% whilst from Year 2 to Year 3 it is (135-130)/130=3.8% -> Therefore lowerThe answer is D. I get how it has nothing to do with trade volume. Could u explain how the inflation decreased.
The CPI will always tend to increase over time in a normal economy (i.e. that doesn't have inflation). The inflation rate only increases if the percentage increase of the CPI in the second year is greater than the percentage increase in the first yearthe answer looks like C to me. the CPI has increased, ie. inflation is increasing, and the import price index has fallen ie. the TOT has improved