If the CPI was 160 in 2008 and 40 in 2005, the cost of living was:
A)4 times higher in 2008 than in 2005.
B)25 percent higher in 2008 than in 2005.
C)constant over the period.
D)4 times lower in 2008 than in 2005

Question

Quizplus · Accepted Answer

To compare the cost of living between the two years, we need to calculate the inflation rate using the formula:

Inflation rate = ((CPI in 2008 - CPI in 2005) / CPI in 2005) x 100%

Inflation rate = ((160 - 40) / 40) x 100% = 300%

This means that the cost of living in 2008 was 300% higher than in 2005. In other words, it was 4 times higher. Therefore, the correct answer is A.

If the CPI Was 160 in 2008 and 40 in 2005