If the Consumer Price Index changes from 120 in year one to 122 in year two,the rate of inflation in the intervening year is
A)22%.
B)20%.
C)2.0%.
D)1.67%.
E)0%.

Question

Quizplus · Accepted Answer

The rate of inflation is calculated as the percentage change in the CPI from one year to the next. In this case, the CPI changed from 120 to 122, which is an increase of 2 points. The percentage change is calculated as (2/120) * 100 = 1.67%.

If the Consumer Price Index Changes from 120 in Year