$$\begin{array} { l l l l l }
\hline \text { Good } & \text { 2015 Price } & \text { 2015 Quantity } & \text { 2016 Price } & \text { 2016 Quantity } \
\hline \text { A } & \$ 2 & 250 & \$ 3 & 200 \
\text { B } & \$ 3 & 300 & \$ 2 & 400 \
\text { C } & \$ 4 & 400 & \$ 5 & 500 \
\hline
\end{array}$$
-What was the inflation rate between the two years?

Question

$$\begin{array} { l l l l l } 
\hline \text { Good } & \text { 2015 Price } & \text { 2015 Quantity } & \text { 2016 Price } & \text { 2016 Quantity } \
\hline \text { A } & \$ 2 & 250 & \$ 3 & 200 \
\text { B } & \$ 3 & 300 & \$ 2 & 400 \
\text { C } & \$ 4 & 400 & \$ 5 & 500 \
\hline
\end{array}$$
-What was the inflation rate between the two years?

Quizplus · Accepted Answer

The inflation rate is calculated as the percentage change in the price level from one period to the next. In this case, the price level is the weighted average of the prices of the three goods. The weights are the quantities of each good.The weighted average price in 2015 is:(2 * 250 + 3 * 300 + 4 * 400) / (250 + 300 + 400) = $3.00The weighted average price in 2016 is:(3 * 200 + 2 * 400 + 5 * 500) / (200 + 400 + 500) = $3.10The inflation rate is:(3.10 - 3.00) / 3.00 * 100 = 3.33%Therefore, the inflation rate between the two years was 3.33%, which is closest to choice D) 3.8 percent.

-What Was the Inflation Rate Between the Two Years? A)

-What Was the Inflation Rate Between the Two Years?
A)