If the price level rose in three consecutive years from 100 to 120 to 140, then the inflation rate over those years would Decrease.
Annual inflation rate is
x=[(120-100)/100] × 100
x= 20%
In the year 3, price level was 140, hence, the inflation rate
y= [(140-120)/120] × 100
y= 16.67%.
Since, we see a continuous fall in percentage the annual inflation rate over those years would decrease.
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