Suppose that the consumer price index (CPI) was 160 in Year X and 166 in Year Y, inflation during Year Y was approximately:
A) zero; prices were stable.
B) 3.8 percent.
C) 6 percent.
D) 66 percent.

Question

Quizplus · Accepted Answer

The inflation rate can be calculated by using the formula: ((CPI in Year Y - CPI in Year X) / CPI in Year X) * 100. Plugging in the numbers, we get: ((166-160)/160) * 100 = 3.75%, which rounds up to 3.8%. Therefore, the inflation during Year Y was approximately 3.8%.

Suppose That the Consumer Price Index (CPI) Was 160 in Year