ECONOMICS (CBSE/UGC NET)

ECONOMICS

BUSINESS CYCLES

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
If the CPI is 93 in 2017 and 97 in 2018, calculate the rate of inflation from 2017 to 2018.
A
4.3%
B
4.12%
C
4%
D
5.1%
E
None of the answers
Explanation: 

Detailed explanation-1: -U.S. inflation rate for 2018 was 2.44%, a 0.31% increase from 2017.

Detailed explanation-2: -To find the CPI in any year, divide the cost of the market basket in year t by the cost of the same market basket in the base year. The CPI in 1984 = $75/$75 x 100 = 100 The CPI is just an index value and it is indexed to 100 in the base year, in this case 1984. So prices have risen by 28% over that 20 year period.

Detailed explanation-3: -The average inflation rate of 3.38% has a compounding effect between 2017 and 2023.

Detailed explanation-4: -Subtract the CPI of the start date from the CPI of the end date. Divide that number by the CPI of the start date. Multiply this number by 100 and add a percent sign, and there’s the inflation rate for that period. 09-Dec-2022

There is 1 question to complete.