9 Using the Consumer Price Index (CP) detailed in the table below, Year 1989 199

Question

9 Using the Consumer Price Index (CP) detailed in the table below, Year 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Year CPI 184.0 124.0 130.7 136.2 140.3 144.5 148.2 152.4 156.9 160.5 163.0 166.6 172.2 2003 00 1962 20108.3 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 195.3 201.6 207.3 215.3 214.5 218.1 224.9 229.6 233.0 236.7 237.0 240.0 179.7 Instructions: Enter your responses rounded to one decimal place. If you are entering any negative numbers be sure to include a negative sign (-)in front of those numbers Calculate the inflation rate for 1994-1995: % 2000-2001: -7% 2007-2008 % 2012-2013: 7%

Explanation / Answer

For calculating the inflation rate betwwn 2 years say year 1 nd year 2, we can use the following formula,

Inflation rate = [CPI (In year 2) - CPI (In Year 1) / CPI (In year 1)] * 100.

Inflation rate,

For the year 1994-1995

Inflation rate = (152.4 - 148.2 / 148.2)*100 = 2.834%

For the year 2000 - 2001

Inflation rate = ({177.1 - 172.2} / 172.2)*100 = 2.845%

For the year 2007 - 2008

Inflation rate = ({215.3 - 207.3} / 207.3)*100 = 3.859%

For the year 2012 - 2013

Inflation rate = ({233 - 229.6} / 229.6)*100 = 1.481%

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