Suppose the Value of the Consumer Price Index (CPI)is 110

Multiple Choice

Suppose the value of the consumer price index (CPI) is 110 in year 1,116 in year 2,and 118 in year 3.Assume also that the price of computers increases by 10% between year 1 and year 2,and by another 10% between year 2 and year 3.The price level is increasing,the inflation rate is _______,and the relative price of computers is _________.

A) increasing;increasing
B) constant;increasing
C) constant;decreasing
D) decreasing;increasing
E) decreasing;decreasing