If the CPI in the United States was 150 in 2003 and 160 in 2004, the inflation rate over the year was_____
A) 10 percent.
B) 20 percent.
C) 7 percent.
D) 30 percent.
E) 50 percent.

Question

Quizplus · Accepted Answer

The inflation rate can be calculated using the formula:

Inflation rate = ((CPI in the current period - CPI in the previous period) / CPI in the previous period) x 100%

Using this formula, we get:

Inflation rate = ((160 - 150) / 150) x 100%
Inflation rate = (10/150) x 100%
Inflation rate = 6.67% (rounded to 7%)

Therefore, the inflation rate over the year was approximately 7 percent. None of the other options are close to this value.

If the CPI in the United States Was 150 in 2003