Asked by Cassie Trucchio on May 12, 2024
Verified
If the consumer price index (CPI)rises over a year from 220 to 230,then the inflation rate is 10 percent.
Consumer Price Index (CPI)
A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, used to estimate the cost of living.
Inflation Rate
The percentage increase in the general level of prices for goods and services in an economy over a period of time.
- Calculate and interpret the inflation rate using the consumer price index (CPI).
Verified Answer
AS
Ankush SodhiMay 19, 2024
Final Answer :
False
Explanation :
The inflation rate is calculated as the percentage change in the CPI over a period, which in this case is (230−220)220×100=4.55%\frac{(230 - 220)}{220} \times 100 = 4.55\%220(230−220)×100=4.55% , not 10%.
Learning Objectives
- Calculate and interpret the inflation rate using the consumer price index (CPI).