Suppose that the chain-weighted index for GDP in Gambia was 275 in 2015 and 350 in 2016. The inflation rate between those two years was approximately
A) 20.2 percent.
B) 27.3 percent.
C) 37.5 percent.
D) 75 percent.

Question

Quizplus · Accepted Answer

To calculate the inflation rate using a chain-weighted index, you need to take the difference between the two years and divide it by the average of the two years, then multiply by 100 percent.

((350-275)/((350+275)/2))*100 = 27.27%
Rounding to one decimal place, the inflation rate is approximately 27.3 percent. Therefore, the correct answer is B.

Suppose That the Chain-Weighted Index for GDP in Gambia Was