For an imaginary economy,the value of the consumer price index was 138.75 in 2016,and the inflation rate was 10 percent between 2015 and 2016.The consumer price index in 2015 was
A)126.1.
B)128.8.
C)148.8.
D)152.6.

Question

Quizplus · Accepted Answer

To find the CPI in 2015, we use the formula: CPI in 2016 = CPI in 2015 * (1 + inflation rate). Rearranging gives CPI in 2015 = CPI in 2016 / (1 + inflation rate). Substituting the given values: 138.75 / 1.10 = 126.1.

For an Imaginary Economy,the Value of the Consumer Price Index