Instructions: Round your answers to 2 decimal places. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. a. Suppose the CPI was 110 last year and is 126 this year. What is this year's rate of inflation? 14.6 percent. b. In contrast, suppose that the CPI was 110 last year and is 107 this year. What is this year's rate of inflation? -2.72 percent. c. What term do economists use to describe this second outcome? Deflation

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Equilibrium Price and Quantity

Equilibrium refers to a state of balance that comes about because there is equality in all forces.