Question

If the consumer price index was 100 in the base year and 106 in the following year, then the inflatiot int was

a) 1.06 percent.
b) 6 percent.
c) 10.6 percent.
d) 106 percent.

Answer 1

The inflation rate can be calculated using the percentage change formula. In this case, the inflation rate is 6%.

Step-by-step explanation:

To calculate the inflation rate, we use the formula: (New CPI - Old CPI) / Old CPI * 100%. Given that the consumer price index (CPI) was 100 in the base year and 106 in the following year, the inflation rate would be (106 - 100) / 100 * 100% = 6%. Therefore, the correct answer is option b) 6 percent.