If a market basket was defined in 2014 and it cost $10,000 to purchase the items in that basket in 2014, while it cost $12,000 to purchase those identical goods in 2015, then the inflation rate from 2006 to 2007 is

Question

Quizplus · Accepted Answer

The inflation rate measures the percentage increase in the price level from one year to the next. In this case, the price level increased from $10,000 in 2014 to $12,000 in 2015, or by $2,000. To calculate the inflation rate, we divide the increase in the price level by the initial price level and multiply by 100%: (12,000 - 10,000) / 10,000 * 100% = 20%. Therefore, the correct answer is (C).

If a Market Basket Was Defined in 2014 and It