What was the inflation rate in 2005 and 2009? how do you know? the inflation rates in 2005 and 2009 were 3 percent and 0 percent respectively because the inflation rate equals the nominal interest rate minus the real interest rate.
Price increases, or inflation, can be thought of as the gradual loss of purchasing power. The average price increase of a selection of products and services over time can serve as a proxy for the rate at which buying power declines.
A unit of currency effectively buys less as a result of the increase in pricing, which is sometimes stated as a percentage. Deflation, which happens when prices fall and buying power rises, can be compared to inflation.
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