Suppose that the consumer price index of a country was 160 at Year X and 164 at the end of Year Y.What was the country's inflation rate during Year Y?
A) 5%
B) 2.5%
C) 64%
D) 164%
E) 32%

Question

Quizplus · Accepted Answer

The inflation rate is the percentage rate of change in the price level from one year to the next. 
In this case, the CPI increased from 160 to 164 from Year X to the end of Year Y. 
To calculate the inflation rate, we use the formula: 
Inflation rate = ((CPI Year Y - CPI Year X) / CPI Year X) x 100%
Plugging in the numbers, we get:
Inflation rate = ((164 - 160) / 160) x 100% = 2.5%
Therefore, the country's inflation rate during Year Y was 2.5%, which is option B.

Suppose That the Consumer Price Index of a Country Was