ECONOMICS
INFLATION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the average quality of goods and services between last year and this year.
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the average prices of goods and services increased between last year and this year.
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the average prices of goods and services decreased between last year and this year.
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the quantity of consumer goods and services produced decreased between last year and this year.
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Detailed explanation-1: -When the CPI is rising it means that consumer prices are also rising, and when it falls it means consumer prices are generally falling. In short, a higher CPI indicates higher inflation, while a falling CPI indicates lower inflation, or even deflation.
Detailed explanation-2: -The Consumer Price Index (CPI) is a measure of the average change overtime in the prices paid by urban consumers for a market basket of consumer goods and services.
Detailed explanation-3: -The Consumer Price Index (CPI) in year 1 was 120 and in year 2 was 150. Inflation is the rise in the price level. The inflation between year 1 and year 2 is calculated below. Hence, the inflation rate between year 1 and year 2 is 25%.
Detailed explanation-4: -Gather prices for common products or services in the past. Collect prices for current products or services. Add the product prices together. Divide the current product price total by the past price total. Multiply the total by 100. Convert this number into a percentage. 13-Jan-2021