17. (Inflation) Here are some recent data on the U.S. consumer price index: Year
ID: 1252096 • Letter: 1
Question
17. (Inflation) Here are some recent data on the U.S. consumer
price index:
Year CPI Year CPI Year CPI
1988 118.3 1994 148.2 2000 172.2
1989 124.0 1995 152.4 2001 177.1
1990 130.7 1996 156.9 2002 179.9
1991 136.2 1997 160.5 2003 184.0
1992 140.3 1998 163.0 2004 188.9
1993 144.5 1999 166.6 2005 195.3
2006 201.8
Compute the inflation rate for each year 1989–2006
and determine which were years of inflation. In which
years did deflation occur? In which years did disinflation
occur? Was there hyperinflation in any year?
Explanation / Answer
There was no deflation over the period. Every year had inflation. Inflation was never higher than 5.4%, so no, there were no instances of hyperinflation 1989 0.048182587 1990 0.054032258 1991 0.042081102 1992 0.03010279 1993 0.029935852 1994 0.025605536 1995 0.028340081 1996 0.029527559 1997 0.022944551 1998 0.015576324 1999 0.02208589 2000 0.033613445 2001 0.028455285 2002 0.015810277 2003 0.022790439 2004 0.026630435 2005 0.03388036 2006 0.03328213 formula for inflation is (new CPI - base CPI) / base CPI
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