Suppose the price index in 2004 was 104;the price index in 2005 was 134;and the inflation rate between 2005 and 2006 was higher than it was between 2004 and 2005.This means that

Question

Quizplus · Accepted Answer

We know that the inflation rate between 2004 and 2005 was (134-104)/104=0.288 or 28.8%. 
Let the price index in 2006 be x. Then, we can write the inflation rate between 2005 and 2006 as (x-134)/134. 
We are given that the inflation rate between 2005 and 2006 was higher than 28.8%, so we can write: 
(x-134)/134 > 0.288 
Solving for x, we get: 
x > 172.65 
So, the price index in 2006 was higher than 172.65. Therefore, the best choice is C.

Suppose the Price Index in 2004 Was 104;the Price Index