Final answer:
The CPI-based rate of inflation between 2021 and 2022 in the baseline scenario is 6.5%, calculated using the percentage change in the cost of a basket of goods, which increased from $100 to $106.50.
Step-by-step explanation:
The question posed is concerned with the calculation of the rate of inflation based on the Consumer Price Index (CPI).
According to the provided information, the total cost of a basket of goods rose from $100 to $106.50 from period 1 to period 2, which indicates the presence of inflation. To calculate the rate of inflation, we can use the percentage change formula:
CPI-based rate of inflation = (New Cost - Original Cost) / Original Cost * 100%
Using the values from the example, the inflation rate would be:
(106.50 - 100) / 100 * 100% = 6.5%
This calculation agrees with the earlier statement in the information that the inflation rate, when basing it on the CPI index numbers, is 6.5%. Thus, the CPI-based rate of inflation between 2021 and 2022 in the baseline scenario is 6.5%.