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AICPA CPA-Business Exam - Topic 3 Question 126 Discussion

Actual exam question for AICPA's CPA-Business exam

Question #: 126
Topic #: 3

[All CPA-Business Questions]

The inflation rate measures:

AThe rate at which nominal GDP increases.

BHow the price of a particular good changes over time.

CHow nominal interest rate changes over time.

DThe rate at which the overall price level increases.

Show Suggested Answer

Suggested Answer: D

Choice 'd' is correct. The inflation rate measures the rate of increase in the overall price level in the economy.

Choice 'a' is incorrect. The inflation rate is associated with price level changes not changes in the nominal value of output.

Choice 'b' is incorrect. Inflation refers to a sustained increase in the overall price level. Not the price of a particular good.

Choice 'c' is incorrect. The inflation rate is associated with price level changes not interest rate changes.

by Lynelle at May 16, 2026, 06:39 AM

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Hildegarde

It's definitely D, overall price level increases.

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Adelle

5 days ago

I feel like I’ve seen something similar in our notes, and D makes the most sense to me as the definition of inflation.

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Marjory

10 days ago

I’m a bit confused; I thought inflation could also refer to specific goods, but that might be a different concept.

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Rene

15 days ago

I remember practicing a question like this, and I think inflation is about the overall price level, so D seems right, but I'm not 100% sure.

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Jacquline

2 months ago

I think the inflation rate is related to how prices change overall, so I might go with D.

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