Narrbegin Exhibit 13.1 Consumer price index
$$\begin{array} {| c | c |}
\hline \text { Year } & \text { Consumer price index } \
\hline 1 & 100 \
\hline 2 & 100 \
\hline 3 & 105 \
\hline 4 & 125 \
\hline 5 & 150 \
\hline
\end{array}$$
-As shown in Exhibit 13.1, the rate of inflation for Year 4 is:
A) 5 per cent.
B) 10 per cent.
C) 19 per cent.
D) 20 per cent.

Question

Narrbegin Exhibit 13.1 Consumer price index
 $$\begin{array} {| c | c |} 
\hline \text { Year } & \text { Consumer price index } \
\hline 1 & 100 \
\hline 2 & 100 \
\hline 3 & 105 \
\hline 4 & 125 \
\hline 5 & 150 \
\hline
\end{array}$$
-As shown in Exhibit 13.1, the rate of inflation for Year 4 is:
A) 5 per cent.
B) 10 per cent.
C) 19 per cent.
D) 20 per cent.

Quizplus · Accepted Answer

To calculate inflation rate for Year 4, we need to use the formula:
[(CPI in Year 4 - CPI in Year 3) / CPI in Year 3] x 100
[(190 - 160) / 160] x 100 = 18.75%
Since inflation rate is typically rounded to the nearest whole number, the answer is 19%. Therefore, the best choice is C.

Narrbegin Exhibit 13 -As Shown in Exhibit 13