Question

Suppose the economy's consumer price index (CPI) in 2008 was 189 and the CPI in 2009 was 202. The inflation rate over the period from 2008-2009 was equal to ____%. Enter your response rounded to one decimal place.

Answer 1

The inflation rate from 2008 to 2009, based on the CPI values of 189 and 202 respectively, was calculated to be 6.9% when rounded to one decimal place.

Step-by-step explanation:

The inflation rate from 2008 to 2009 can be calculated using the consumer price index (CPI) values for those years. We use the formula to calculate the percentage change in the CPI, which gives us the inflation rate. The formula is: (CPI in later year - CPI in earlier year) / CPI in earlier year × 100%. Applying this formula to the CPI values provided:

Inflation Rate = ((202 - 189) / 189) × 100%

Inflation Rate = (13 / 189) × 100%

Inflation Rate = 0.068783069 × 100%

Inflation Rate = 6.8783069%

Inflation Rate = 6.9% (rounded to one decimal place)

Thus, the inflation rate for the period from 2008 to 2009 was 6.9%.