The table below shows an economy's rate of inflation in each of four consecutive years.
| Year 1 | Year 2 | Year 3 | Year 4 | |
|---|---|---|---|---|
| Inflation rate (%) | 5.5 | 4.2 | 3.0 | 1.8 |
It can be concluded from the data above that, over the 4-year period,
the purchasing power of money has increased.
assuming constant nominal incomes, real income has fallen.
the average price level was lower in Year 4 than in Year 1.
the value of money fell at an increasing rate.
