Question

Suppose a market basket has a value of $400 in 2007 and $384 in 2008. According to this, the rate of inflation from 2007 to 2008 is .

(A) -16%
(B) -4%
(C) -2%
(D) 4%
(E) 16%

Answer 1

The rate of inflation from 2007 to 2008 is -4% based on the value of the market basket. option (B)

Step-by-step explanation:

The question asks for the rate of inflation from 2007 to 2008 based on the value of a market basket. To calculate the inflation rate, we need to find the percentage change in the value of the basket. The formula for percentage change is (new value - old value)/old value x 100. So, the percentage change would be ((384 - 400)/400) x 100 = -4%. Therefore, the correct answer is (B) -4%.