During Year 1, the price of a barrel of oil rose from $60 to $110. In Year 2, it then climbed again to $115 per barrel. Assume that changes in the oil price affect the general price level immediately. How will these changes in the oil price affect a country’s Consumer Price Index and its inflation rate in Year 2, compared with Year 1?
- ACPI: decrease; rate of inflation: decrease
- BCPI: decrease; rate of inflation: increase
- CCPI: increase; rate of inflation: decrease
- DCPI: increase; rate of inflation: increase