If the consumer price index (CPI)was 120 at year-end 2008 and 126 at year-end 2009,inflation during 2009 was approximately
A)4 percent.
B)5 percent.
C)6 percent.
D)7 percent.

Question

Quizplus · Accepted Answer

To calculate the inflation rate, we need to find the percentage increase in CPI from the previous year to the current year.

The percentage increase in CPI can be calculated by using the following formula:

[(Current year CPI - Previous year CPI) / Previous year CPI] x 100

Using the given values, we can calculate the percentage increase in CPI during 2009 as:

[(126 - 120) / 120] x 100 = 5%

Therefore, the inflation during 2009 was approximately 5 percent. The correct choice is B) 5 percent.

If the Consumer Price Index (CPI)was 120 at Year-End 2008