The table below shows the price index for Zimbabwe starting in 2000. $$\begin{array} { | l | l | }
\hline \text { Year } & \text { Price Index } \
\hline 2000 & 100.0 \
\hline 2001 & 173.4 \
\hline 2002 & 404.37 \
\hline 2003 & 1880.5 \
\hline 2004 & 8462.2 \
\hline 2005 & 28,586.6 \
\hline 2006 & 319,222.5 \
\hline
\end{array}$$
Which of the following statements correctly describe the behavior of prices in Zimbabwe?
i. The cost of the CPI basket increased.
ii. The inflation rate was 73.4 percent between 2000 and 2001.
A) ii only
B) i only
C) both i and ii
D) neither i nor ii

Question

The table below shows the price index for Zimbabwe starting in 2000. $$\begin{array} { | l | l | } 
\hline \text { Year } & \text { Price Index } \
\hline 2000 & 100.0 \
\hline 2001 & 173.4 \
\hline 2002 & 404.37 \
\hline 2003 & 1880.5 \
\hline 2004 & 8462.2 \
\hline 2005 & 28,586.6 \
\hline 2006 & 319,222.5 \
\hline
\end{array}$$
Which of the following statements correctly describe the behavior of prices in Zimbabwe?
i. The cost of the CPI basket increased.
ii. The inflation rate was 73.4 percent between 2000 and 2001.
A) ii only
B) i only
C) both i and ii
D) neither i nor ii

Quizplus · Accepted Answer

The cost of the CPI basket increased as indicated by the rising price index. The inflation rate between 2000 and 2001 is calculated as $(173.4 - 100) / 100 \times 100 = 73.4\%$.

The Table Below Shows the Price Index for Zimbabwe Starting