Suppose that the Consumer Price Index (CPI), a widely used measure of inflation in the U.S.,...

Question

Question

Suppose that the Consumer Price Index (CPI), a widely used measure of inflation in the U.S.,...

Suppose that the Consumer Price Index (CPI), a widely used measure of inflation in the U.S., rose from 100 in one year to 120 during the next year. The rate of inflation between the two (2) years is A. 120%. B. 220%. C. 20%. D. Cannot be determined without further information.

business economics

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

The rate of inflation is calculated as follows.

Rate of inflation $120 100/100$

$20/100$

$=0.2$

$0.2 × 100-20$ . (to put in percentage we multiply the answer with 100).

Ans: $20$ %.

Add a comment

Answer 2

Similar Homework Help Questions

1. The index used to measure inflation is the a. consumer price index. b....

1. The index used to measure inflation is the a consumer price index. b. producer price index. c. wholesale price index. d. GDP deflator. 2. The price index in year 2 is 110 and the price index in year 3 is 115. The rate of inflation between years 2 and 3 is a. 1.04%. b. 2.04%. c. 4.17%. d. 4.55% 3. The situation that occurs when the inflation rate falls is called a. deflation b. disinflation c. stagflation d. inflation 4. The situation that occurs when the price level falls is called a. deflation b. disinflation c. stagflation d. inflation 5. The situation that occurs when...
Use the information in the table to calculate a consumer price index (CPI) and the inflation...

Use the information in the table to calculate a consumer price index (CPI) and the inflation rate. The base year is 1975. Round answers to two decimal places. Market basket Quantity 1975 prices 1976 prices A dozen eggs 29 $1.10 $1.70 Calculator 19 $15.00 $17.00 Microwave oven 9 $180.00 $230.00 What is the CPI for 1975? What is the CPI for 1976? What is the inflation rate for 1976? Use the information in the table to calculate a consumer price...
The Consumer Price Index (CPI) is just one price index that we use to measure inflation....

The Consumer Price Index (CPI) is just one price index that we use to measure inflation. The CPI was 33.4 in 1967 and 160.5 in 1997. Dividing 160.5 by 33.4 yields a factor of 4.8, so if Dr. Evil thought that one million dollars was a lot of money in 1967, an equivalent amount in 1997 would be $4.8 million. Imagine if you were cryogenically frozen in the 1960s and revived 30 years later. Changes in societal behavior, advances in...

ASSIGNMENT #5 9. One way the consumer price index (CPI) differs from the GDP chain price...

ASSIGNMENT #5 9. One way the consumer price index (CPI) differs from the GDP chain price index is that the CPI: uses current year quantities of goods and services b. a. includes separate market baskets of goods and services for both base and current years. includes only goods and services bought by typical urban consumers. d. C. is bias free. 10. Suppose a market basket of goods and services costs $1,000 in the base year and the consumer price index...
The Consumer Price Index (CPI) is a measure of the change in the cost of goods...

The Consumer Price Index (CPI) is a measure of the change in the cost of goods over time. If 1982 is used as the base year of comparison in some country (CPIequals100 in 1982), then the CPI of 200.8 in 2006 would indicate that an item that cost $ 1.00 in 1982 would cost $ 2.01 in 2006 in this country. It is known that the CPI in this country has been increasing at an approximately linear rate for the...
Use the information in the table to calculate a consumer price index (CPI) and the inflation...

Use the information in the table to calculate a consumer price index (CPI) and the inflation rate. The base year is 1975. Round answers to two decimal places. Market basket Quantity 1975 prices 1976 prices A dozen eggs 21 $0.50 $0.90 Calculator 11 $10.50 $14.00 Microwave oven 2 $130.00 $150.00 What is the CPI for 1975? 1.41 What is the CPI for 1976? 1.17 What is the inflation rate for 1976? %

Part III-Consumer Price Index The U.S. Consumer Price Index (CPI) from July 2005 through March 2006 is shown...

Part III-Consumer Price Index The U.S. Consumer Price Index (CPI) from July 2005 through March 2006 is shown below. CPI 199.0 198.5 198.0 197.5 196.5 The approximating curve shown is given by the function It) 0.06t-0.8t2+ 3.Jt+ 195,0st s 8, where t is time in months and t=0 corresponds to July 2005 1. Use the model to compute the monthly inflation rates for December 2005 and February 2006. Show work and include units with your answer. slowing down (decelerating) in...
What is the Consumer Price Index (CPI) and how is it determined each month? How does...

What is the Consumer Price Index (CPI) and how is it determined each month? How does the Bureau of Labor Statistics (BLS) calculate the rate of inflation from one year to the next? What effect does inflation have on the purchasing power of a dollar? How does it explain differences between nominal and real interest rates? How does deflation differ from inflation? (Answer in your own words)
Question 2 15 pts What is the Consumer Price Index (CPI) and how is it determined...

Question 2 15 pts What is the Consumer Price Index (CPI) and how is it determined each month? How does the Bureau of Labor Statistics calculate the rate of inflation from one year to the next? What effect does inflation have on the purchasing power of a dollar? How does it explain differences between nominal and real interest rates? How does deflation differ from inflation?

Suppose that the consumer price index (CPI) was 200 in 2018 and 208.2 in 2019. What...

Suppose that the consumer price index (CPI) was 200 in 2018 and 208.2 in 2019. What was the inflation rate between 2018 and 2019? A. zero B. 4.28% C. 8% D. -4.28% E. -4.10% F. 4.10%

Suppose that the Consumer Price Index (CPI), a widely used measure of inflation in the U.S.,...

Homework Answers

Add Answer to:
Suppose that the Consumer Price Index (CPI), a widely used measure of inflation in the U.S.,...

Post as a guest

Earn Coins

1. The index used to measure inflation is the a. consumer price index. b....

Use the information in the table to calculate a consumer price index (CPI) and the inflation...

The Consumer Price Index (CPI) is just one price index that we use to measure inflation....

ASSIGNMENT #5 9. One way the consumer price index (CPI) differs from the GDP chain price...

The Consumer Price Index (CPI) is a measure of the change in the cost of goods...

Use the information in the table to calculate a consumer price index (CPI) and the inflation...

Part III-Consumer Price Index The U.S. Consumer Price Index (CPI) from July 2005 through March 2006 is shown...

What is the Consumer Price Index (CPI) and how is it determined each month? How does...

Question 2 15 pts What is the Consumer Price Index (CPI) and how is it determined...

Suppose that the consumer price index (CPI) was 200 in 2018 and 208.2 in 2019. What...

Suppose that the Consumer Price Index (CPI), a widely used measure of inflation in the U.S.,...

Homework Answers

Add Answer to: Suppose that the Consumer Price Index (CPI), a widely used measure of inflation in the U.S.,...

Post as a guest

Earn Coins

Add Answer to:
Suppose that the Consumer Price Index (CPI), a widely used measure of inflation in the U.S.,...