Suppose the CPI is 220 in one year and 210 in the next year.What is the approximate annual rate of inflation as measured by the CPI?

Name: Suppose the CPI is 220 in one year and 210 in the next year.What is the approximate annual rate of inflation as measured by the CPI?
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Quizplus · Accepted Answer

The annual rate of inflation is calculated as [(New CPI - Old CPI) / Old CPI] * 100. Here, it is [(210 - 220) / 220] * 100 = -4.545...%, which rounds to approximately -4.6 percent, indicating deflation rather than inflation.

Suppose the CPI Is 220 in One Year and 210