The table below shows the Consumer Price Index (CPI) of an economy over a four-year period. Year 1 is the base year.
| Year | Consumer Price Index (CPI) |
|---|---|
| Year 1 | 100.0 |
| Year 2 | 106.0 |
| Year 3 | 111.3 |
| Year 4 | 109.1 |
Which of the following statements correctly describes the changes in the price level from Year 2 to Year 3, and from Year 3 to Year 4?
From Year 2 to Year 3, the economy experienced disinflation; from Year 3 to Year 4, it experienced deflation.
From Year 2 to Year 3, the economy experienced deflation; from Year 3 to Year 4, it experienced disinflation.
From Year 2 to Year 3, the economy experienced hyperinflation; from Year 3 to Year 4, it experienced stagflation.
From Year 2 to Year 3, the economy experienced disinflation; from Year 3 to Year 4, it experienced stagflation.
