Question

The CPI in 1974 equaled 0.49. The CPI in 1975 equaled 0.54. The rate of inflation between 1974 and 1975 was ______ percent.

Answer 1

Answer: 10.2%

Step-by-step explanation:

The Consumer Price Index CPI is a method used to measure inflation, or how much value you can get for your money across different years. It does this by using a weighted average of the price of commonly used goods and services in a country. By comparing the CPI of one year against another, we can calculate inflation or deflation.

The formula to calculate inflation is:

`(CPI of a later year - CPI of an earlier year)/(CPI of an earlier year)`

`(0.54-0.49)/(0.49)`

`(0.05)/(0.49)`

=0.102 or 10.2%